The impact of irresponsible rumours on the South African economy
This morning, the rand is trading at R15.51 to the dollar. In 11 days it's lost 54 cents against the greenback. This is only the beginning of the rand's fall.
If you think this is bad, keep an eye on the rand this week. I expect to see a significant weakening against the dollar thanks to new rumours in the media related to the arrest of our finance minister, Pravin Gordhan.
“Pravin Gordhan faces 'imminent arrest'”
This is the headline from the Sunday Times yesterday that could cripple the rand and South Africa’s global economic position.
According to the article, The Hawks are gunning for Pravin Gordhan to be prosecuted for espionage for his involvement in the establishment of the SARS “rogue unit” while he was the tax agency’s commissioner.
If the rumours are true, you can expect the rand to fall drastically, destroying all chances of recovering from the problems caused by Jacob Zuma’s irresponsible firing of Nhlanhla Nene in December 2015.
The presidency was quick to respond to the allegations saying, that it is the work of dangerous information peddlers who wish to cause confusion and mayhem in the country.
The Democratic Alliance spokesman, David Maynier also responded saying that the arrest would be the catalyst of the end of South Africa’s economy. It will “cause an economic earthquake and make ‘9/12’ look like a minor economic tremor”.
Even if these are just rumours, South Africa can’t handle another economic scandal
I don’t doubt for a second that there are forces in the country that would like to cripple the economic forecasts for South Africa. But the South African government seems to be playing directly into their hands.
The truth is, that it is time for a change. Continuous cabinet shuffling and the unwavering support for our president is one of the main reasons we’re struggling on the global economic front.
Last week, I told you that South Africa has slipped to the third largest economy in Africa
. Despite all the political unrest and increased violence, the Egyptians managed to beat South Africa.
I’ve heard very little from our government on how they plan to correct this serious problem.
That’s why now more than ever, we need to focus on protecting our wealth, investments and our future. To get your hands on all the best asset protection strategies at the next South African Investor member meeting, you must be a member of the South African Investor.