The political tone in South Africa, which possesses one of the continent’s top economies, has notably shifted since Cyril Ramaphosa replaced Jacob Zuma as president. Ramaphosa has moved aggressively against corrupt members of the African National Congress (ANC) in a bid to reverse the ruling party’s descent into graft and mismanagement. At the same time, he has tried to instill investor confidence in the South African economy by tempering some of Zuma’s more populist policies and pushing for more policy clarity in critical sectors such as mining.

South Africa’s most recent mining charter, instituted under Zuma but suspended under a court challenge, was viewed as a significant burden on the industry, a keystone of the economy. A particular sticking point was a subclause of the ANC’s broader Black Economic Empowerment push that raised the requirement for company ownership by members of historically disenfranchised groups from 26 percent to 30 percent. Companies who do business in South Africa understand that the general trend toward greater ownership by people held back under apartheid is inevitable. However, the new share requirements raised concerns among mining businesses about how they would maintain the 30 percent mandate if their black partners sell their shares. If the policy had been implemented, mining company executives worried, it could significantly drain their businesses’ bottom lines. After the Ramaphosa administration came into power in February, however, it signaled it would soften the requirement in a new mining charter that it promised to release in June. South Africa’s mining minister has specified that the revised charter would rationalize the clause to help companies avoid punishment if their black partners sell their shares.

The flexibility the government is displaying with regard to the mining charter is important for Ramaphosa’s overall narrative that South Africa is open for business. The time he has to placate investors and grow the economy may be limited. Beyond the third quarter, the campaign season for the 2019 elections will firmly take over. This will require the ANC to shore up support among its bases, and none is more important to the party than the impoverished black majority.

A key issue for that electorate will be a proposal that allows the government to expropriate land without compensation to give to members of historically disenfranchised groups. Ramaphosa is counting on being able to placate foreign investors now and his base later, enabling the economy to more fully rebound and thus reducing populist pressures ahead of the election. But the highly controversial land issue might not allow his strategy to proceed as planned. Depending on how the government addresses it, the issue may thoroughly undermine Ramaphosa’s efforts to court more business by spooking investors.

Zimbabwe: Optics and Outcome

South Africa isn’t alone in pushing a new investment narrative. Since the end of Robert Mugabe’s almost four decades in power, Zimbabwe’s new leader has sought to reopen relations with the West and end years of pariah status. These efforts have included pushing through investment regulation reforms and allowing white farmers to regain access to land that had been confiscated in recent decades.

Despite some initial hints of success from those efforts, international investors remain wary, given the country’s history of government interference in the private sector. In particular, Western governments and companies will exercise caution until the country’s elections conclude, by August at the latest. To instill confidence in foreign investors, President Emmerson Mnangagwa needs to gain a mandate to enact further reforms addressing the country’s woefully broken political and economic systems. Without that strong hand, he may be forced to rely more on the current system and its downsides, such as vast patronage networks that support party military loyalty. At the same time, the ruling party must also avoid a tainted victory. Any sign of voter fraud or crackdowns on the already battered opposition would likely lead Western governments to walk away.

But even if the elections prove to be clean, the corruption-riddled system that the governing party has benefitted from for decades will continue to hamper investment in Zimbabwe. Under that system, the economy suffered from debilitating interference by elites, decades of weak policies and the effects of a downturn in investment. A structural weakness in the economy — something that must be tackled before a flood of foreign investment can enter — is the acute shortage of foreign currency, which has made moving currency in and out of the country difficult. These hurdles, combined with the concerns over election conduct, will have an outsized effect on Zimbabwe’s investment push.

Angola: New Beginnings?

Decades of civil war, followed by a lucrative surge in oil production, left Angola’s economic system closed off to outsiders and isolated from the rest of southern Africa’s economies. However, after Jose Eduardo dos Santos, in power since 1979, stepped down in late 2017, successor Joao Lourenco has taken steps to make doing business in the country, which had been notoriously difficult even by African standards, easier. He instituted crackdowns on corruption and removed those with close ties to dos Santos. But he has also eliminated other hurdles to foreign investment by relaxing visa requirements, partially devaluing Angola’s currency, and scrapping a law that required foreign businesses to partner with local firms. That regulation created a particular burden because it required a minimum investment of $230,000 with at least 35 percent of the capital coming from local partners.

Nevertheless, for the “economic miracle” that Lourenco has promised to Angolans to materialize, far deeper reforms will be needed. In implementing them, he is sure to encounter resistance from entrenched interests that will be affected by the policy changes, putting Lourenco’s reformer credentials to the test. One indicator of his ability to push more changes would come with a successful effort to further devalue Angola’s currency, the kwanzaa, even if it runs against the interests of elites who significantly profit from parallel exchange networks. His ability to secure deals to develop more diverse sectors of the economy, especially in agriculture and aviation, would also indicate an earnest reform push in the months ahead.

The leadership changes in southern Africa are creating new opportunities for these countries. Nevertheless, there are potential pitfalls awaiting each country, whether elections this year in Zimbabwe, those in 2019 for South Africa, or elite infighting in Angola. How these countries mitigate these issues will impact their economic openings.