2019 was a year of cataclysmic political and economic change on the continent. Revolutions convulsed Algeria and Sudan, deposing long-time strongmen Omar al-Bashir and Abdelaziz Bouteflika in April. Public anger and discontent stretched to the southernmost reaches of the continent in September, as mobs looted foreign-owned stores in South Africa, while other citizens took to the streets to protest a spate of violent attacks against women. It was hardly ideal timing for embattled President Cyril Ramaphosa, who was forced to avert his gaze from the expensively hosted World Economic Forum.
Meanwhile, while the African Continental Free Trade Agreement received its final ratification from Gambia in April, Nigeria raised the drawbridge, closing its land borders to the movement of goods in an anti-smuggling crackdown that sent shockwaves through West Africa in October.
South Africa's story
In South Africa, a year of hope turned into a frustrating continuation of economic and institutional inertia as Ramaphosa struggled to turn promises into reform. Growth continued to stall while job creation languishes. But more storm clouds are gathering as the country faces the real prospect of a credit downgrade if the government's new budget, released in February, fails to deliver a viable turnaround plan that promises big results to international investors,
If South Africa's debt falls to sub-investment grade, it could spark a sell-off by institutional investors across the the globe, including pension funds, hedge funds and banks, says Chris Vandome, a research associate at Chatham House's Africa programme in London.
"That could result in $15bn leaving South Africa effectively," says Vandome, citing figures released by BNY Mellon. This enormous financial fallout would raise borrowing costs at a time when the country desperately needs loans and portfolio investment to balance its deficit. With South Africa's 2019 growth projections lowered from 1.2% to 0.7% by the International Monetary Fund (IMF), and popular discontent brewing, there is little room for error.
One thing that could boost South Africa is the easing of trade tensions following a deal agreed in December by Washington and Beijing. A pick-up of global trade after a poor year could provide a lift for commodities such as South African palladium, which accounts for 40% of the global supply, according to Charlie Robertson, the global chief economist at Russian investment bank Renaissance Capital.
"We're seeing palladium prices reach record highs in South Africa, at least in the past few years, with platinum and palladium making up 10% of their...