Waning confidence in South Africa

The plunging of the South African currency coincides, not surprisingly, with news that the business confidence index has dropped to a six-month low.

Ominously, a spokesman for the South African Chamber of Business talks about a downward phase -- the last thing South Africa needs right now. Reasons for the negative sentiment include the view among foreign investors that the (national) budget did not adequately tackle fiscal reform, and also the sudden resignation of Chris Liebenberg as minister of finance.

But more ominously three political reasons are highlighted: increasing tension, if that is possible, between the (ruling African National Congress and Zulu nationalist Inkatha Freedom Party) ahead of next month's local government elections; the government's seeming inability to deal with crime; and uncertainty about final aspects of the constitution.

To this we can now add the constitutional challenge to the Truth Commission (which will investigate human rights abuses during the apartheid era). This wrangle has the potential to be extremely divisive.

It is important to note that while the perceived economic fault lines will disappear in time, the same assumption cannot be made about our political problems. The world at large is no longer oohing and aahing about South Africa and therefore our politicians have to get their act together.

-- The Star, Johannesburg