Trump tweets could influence investors, warns economist

Trump tweeted on Wednesday that he will ask Secretary of State Mike Pompeo to compile a study on land expropriation without compensation and the killing of white farmers.

The rand dipped by 1.5% against the US dollar, slipping to R14.36, following Trump’s tweet.

“The one percent fall in the rand is probably because of President Trumps tweet but the one percent depreciation to the rand is not enough to cause traumatic pain to consumers. What people should be focusing on is the 15% odd depreciation of the rand since April but this one particular issue is not likely to see the rand depreciate further,” says Jammine.

But at the same time he warns that the tweet could have an influence om the way South Africa is perceived by foreign investors.

“Trump’s statement was seen negatively by foreign investors regarding the approach to the South African economy. It simply highlighted the fact that foreign investors are going to be unwilling to commit to investing in South Africa so long as there is this spectre of land exportation without compensation.”

Jammine says the South African government did the right thing by raising concerns with the United States government about the tweet.

“I think the South African government is doing the right thing, in basically raising this tweet issue with the US government and possibly expressing its dissatisfaction with it. But beyond doing that I don’t think that there is very much more South Africa can do. South Africa is weak relative to the United States.” 

President Cyril Ramaphosa recently announced that the African National Congress (ANC) is going ahead with plans to change Section 25 of the Constitution to allow for the expropriation of land without compensation