IMF chief Christine Lagarde said on Tuesday she had met with South African Deputy President Cyril Ramaphosa on the sidelines of the World Economic Forum in Davos and agreed that structural challenges were a burden to economic growth in Africa’s largest economy.
Their meeting comes a day after the International Monetary Fund cut South Africa’s growth forecast for the next two years, citing political uncertainty.
“We concurred that long-standing structural challenges continue to weigh on growth in South Africa,” Lagarde said in a statement, adding: “We consequently agreed that bold and timely reforms are needed to create an environment conducive to job creation and less inequality.”
Ramaphosa was elected president of the ruling African National Congress last month, making him likely to replace President Jacob Zuma in 2019, or even earlier.
He has signaled a departure in style and governance from Zuma’s scandal-plagued administration. The ANC is currently discussing whether to cut short Zuma’s tenure as head of state.
South African businesses have urged Ramaphosa and the ANC’s newly elected leaders to quickly introduce reforms that would restore investor confidence and reverse the economy’s decline.
The South African currency, the rand, has surged since Ramaphosa took the reins of the ANC.
Reporting by Lesley Wroughton; Editing by James Dalgleish