The Global Business Environment Read the case study entitled “The weakening Rand against the $US Dollar and growth prospects” and answer all the subsequent questions . The weakening Rand against the...

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The Global Business Environment





Read the case study entitled “The weakening Rand against the $US Dollar and growth prospects” and
answer all the subsequent questions.



The weakening Rand against the $US Dollar and growth prospects


South Africa’s currency has lost its value against the US$ Dollar in the past ten years as illustrated in the figure below.


Figure 1: The value of the Rand against the Dollar






Source: South African Reserve bank (2020), available at https://www.resbank.co.za/Research/Pages/Research-Home.aspx









Question 1


What measures should South Africa put in place to ensure that the weakening Rand does not have an effect on growth?
[30 marks]










Question 2


You are in senior management in a South African company that exports fresh produce to the SADC region (Southern African Development Community). Your company seeks to grow its footprint into Africa. You have been tasked to identify two countries in the East African Community (EAC) where there are lucrative opportunities for exporting fresh produce. You have been asked to select these two countries on the basis of the extent to which each of the two countries in the EAC is globalised. You have done your research that analyses the extent to which each country in the EAC is globalized. Write a report to the board of your company with recommendations on which two countries to expand to, using at least four globalisation indices to support your recommendations.
[70 marks]










Marking guidelines


o You are required to carefully examine the requirements of the questions and make sure all elements in the questions are addressed. This does not call for a regurgitation of facts but a critical usage and application of those facts towards a logical conclusion. Your answers to questions will be assessed in terms of the level of communication displayed, the insights and inferences drawn, and your ability to show the implications of the factors that you have assessed and discussed.


o An answer that merely gives a bullet list of points, without showing insight into the reasons and results, will not earn good marks.


o You score marks for the quality of your answers (logical, cohesive and referenced arguments), not for filling the pages with words.


o Provide your sources in accordance with the Harvard Referencing manual. Use in-text citation and provide a bibliography.









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Answered Same DayApr 27, 2021

Answer To: The Global Business Environment Read the case study entitled “The weakening Rand against the $US...

Moumita answered on Apr 29 2021
155 Votes
THE WEAKENING RAND AGAINST THE $US DOLLAR AND GROWTH PROSPECTS
Question 1
To answer the current question, first one has to know the effects the rand has on growth and how the situation has arrived at such a critical stage. The weakness of the rand over a short period had a great effect on the market of South Africa. The weakening of rand comes as no surprise as being one of the 25 currencies in the pool of emerging currencies in the world alongside Russian ruble and Brazilian zeal, rand is the most liquid-able currency and is also used as a mechanism by traders to exit the market. The question of how the rand has fallen so sharply is due to the effects of the world economy coming to a shutdown and the developments in China leading to fall in economic activities alongside the issues in Greece, which has been unable to pay debt of the government, and weakens the European economy. In addition, some minor internal issues of the government that have led to the crisis and have major effect, on the growth of the country’s economy.
The Effects of the rand falling sharply are on the import and export business the imported goods would cost more to the country and the business while the expert items would sell at a lower price (Aiyar et al., 2016). The imported goods sum up to not only luxury products, but also, necessary items and finished goods. The effects can also be felt in the resource-based business; South Africa being one of the most resources based countries a fall in the metal price would mean more and more loss in employment as less demand would mean less production and to combat that the companies would require to apply layoff strategy. The country currently has a high unemployment rate which accounts to be around 25%. To mitigate the situation there are several steps that the South African government can take that can have a great impact in reviving the currency value. The best way to do this would be selling the foreign exchange assets and raise the interest rate, making the inflation rate reduce would also mean that there are much more competitive export strategies and thus there would be a flow of foreign money that would make the end raise its value in the international market. The other way the country can improve its currency value is to buy its own currency, this would make shortage of the currency in the global market and there would be an increase in the currency value.
Question 2
There are several opportunities in the EAC region in the modern days....
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