Concerns were raised on Monday (21 January) after South African finance minister, Tito Mboweni, indicated that he was in talks to help bail out Zimbabwe.

While the National Treasury has since confirmed that it has declined a $1.2 billion loan request to Zimbabwe, questions were raised as to how the ongoing unrest in our northern neighbour may begin impacting South Africa’s economy.

Speaking to BusinessTech, Maarten Ackerman, chief economist and Advisory Partner at Citadel Wealth Management, said that the markets do not seem to be too concerned about the situation in Zimbabwe at this stage in time.

“Zimbabwe has had many underlying structural issues for many years, so these issues are not the worry at present – but rather the violence accompanying the current protests is the cause for concern,” he said.

He added that while there may have been an influx in Zimbabwean immigrants over the past week, this was not unusual for South Africa which has previously aimed to ‘legalise and regularise’ most of them.

“If the protests continue and there is a marked rise in illegal immigrants, eventually that will create a further liability for the SA government with a greater strain on infrastructure (such as Eskom and electricity) and social structures, which are already in a stressed state.

“At this stage, the markets seem to be ignoring this risk completely,” he said.

No money to bail out Zim

While finance minister Tito Mboweni has indicated that South Africa will not stand by idly while its northern neighbour suffers, the reality is that we just don’t have the money to bail out Zimbabwe, said Ackerman.

“Zimbabwe did request a $1.2 billion (roughly R17 billion) loan from South Africa which was declined in December.

“It would be very difficult for the South African economy at this stage when we need as much cash as possible to invest locally and to build infrastructure and capacity,” he said.

“Not only that, but we need to satisfy the rating agencies of our own financial position and we cannot jeopardise that by lending money we don’t have to others. It would have a negative impact on the local market and the currency.”

Ackerman said that South Africa might facilitate assistance through SADEC, the World Bank and even the BRICS Banks – but financial support is unlikely to come directly from South Africa itself.

“We might work with the IMF and the World Bank to see if there is any way to fund or help Zimbabwe, but despite promises made, there is simply no money available for any bailout.”


Ackerman noted that South Africa’s economy was previously hit in the early 2000s when contagion from events in Zimbabwe heightened risk aversion among South African investors – both local and foreign.

“However, I believe that this would only be the case now if the protests were to spread into South Africa – which is a possibility if the Zimbabwean government can’t stabilise and calm the situation,” he said.

“Given that South Africa is heading towards elections, there is heightened potential for tension which could impact on investor sentiment.”

He added that this risk remains fairly low as the concerns regarding Zimbabwe are mostly already factored into investor sentiment.

“However, the longer the unrest persists, the greater the chance of more serious consequences for both economies and the more likely the fallout will be felt in investor sentiment.”

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