Goldman Sachs sees a silver lining for South Africa: The economy is at its lowest point and the only way is up.

“The bad news is we are at 0.6% growth for 2019,” Colin Coleman, a partner and head of sub-Saharan Africa for the New York-based bank, said in Johannesburg last week.

“The good news is our growth outlook has risk to the upside, there is no risk to the downside, because we are at the bottom.”

The comments come as Goldman Sachs bets that President Cyril Ramaphosa will be able to get the continent’s most-industrialised economy back on track as the lender expands its operations in the country.

Foreign investors are waiting to see if South Africa will “self-correct” once prosecutions for corruption during Jacob Zuma’s almost decade-long term as head of state start happening, Coleman said.

Goldman Sachs has long been bullish on South Africa’s prospects, with the bank’s economists in May last year predicting an expansion of 2.4% for 2018. The economy expanded 0.8% last year.

If South Africa is able to keep electricity supply stable it should be able to lift exports and see growth in the finance, telecommunications and mineral resources sectors, he said.

“If we can get the basics fixed, our growth rate should be at 2.5%, and our ability to be back there is quite good.”

But for South Africa, keeping the lights on has been a challenge. State-owned utility Eskom is piled with debt, an inflated wage bill and is battling to manage operations and maintain infrastructure.

Rolling blackouts are estimated to have cost 0.5% of South Africa’s economic growth in the first quarter of this year alone, he said.

Only Eskom

Coleman expects Eskom to enter a phase of stabilisation by the end of the year, with plans to restructure its operations taking shape next year.

“If you ask global investors what are the three things that they want resolved before they start again to pile into South Africa’s financial markets they say ‘the first thing is to fix Eskom, the second thing is fixing Eskom and the third thing is fixing Eskom,” he said.

Goldman, which is seeking a primary banking license in South Africa, is investing significant amounts of capital to become a primary dealer and to trade on the Johannesburg stock exchange and local currency fixed-income market, he said.

“You have to have R1 billion ($68 million) of capital in the country,” Coleman said.

“All our trading systems have been set up – we have hired people, we hired another 15 people and we put in the most modern trading system in our Johannesburg office in the world. So we are all in.”