Why it is hard for foreign investors to be bullish on South Africa

THE FIRST question to consider in any reckoning of South Africa is whether you can get through it without a story about Nelson Mandela. You can’t, of course. So here is one that seems apposite. Mandela and his fellow prisoners on Robben Island were allowed one book other than the Bible. They opted for the collected works of Shakespeare. Each marked a favourite passage. Mandela chose one from “Julius Caesar”: “Cowards die many times before their deaths; the valiant never taste of death but once.”

Fast-forward from the struggle against apartheid to today. South Africa’s economy has shrunk in two of the past three quarters. The state-owned power company has announced a series of rolling blackouts. An unchecked budget deficit means public debt is on track to rise above 70% of GDP by 2022. The national airline has sought protection from its creditors. The country’s investment-grade credit rating is hanging by a thread.