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TRUMP'S SA SHOCK

South African assets fall after Trump says will cut off funding

South Africa's rand, stocks, and bonds fell after Trump threatened to cut funding over land expropriation concerns
Reuters
By Reuters
3 Feb
rand budget South African Rand coins are seen in this illustration picture taken October 30, 2020. REUTERS/Mike Hutchings/Illustration/File Photo

JOHANNESBURG, Feb 3 (Reuters) - South Africa's rand, stocks and government bonds fell on Monday after US President Donald Trump said he would cut off funding to the country.
Trump said on Sunday, without citing evidence, that "certain classes of people" in South Africa were being treated "very badly" and he would suspend aid until the matter was investigated.
He said South Africa was confiscating land, 10 days after President Cyril Ramaphosa signed into law legislation that allows the state to expropriate land in the public interest under certain circumstances.
Trump's comments, made in a Truth Social post, did not directly name the expropriation act.
At 1035 GMT, the rand traded at 18.94 against the US dollar , about 1.2% weaker than its closing level on Friday. Earlier in the day it was down almost 2%.
On the Johannesburg Stock Exchange, the Top-40 index last traded down about 1%,  while the benchmark 2030 government bond tumbled as the yield rose 15.5 basis points to 9.21%.
"South Africa has found itself in Trump's crosshairs," said Danny Greeff, co-head of Africa at ETM Analytics.
"Whether it is because of the land expropriation act, as President Trump says, or a warning shot over South Africa's contrarian positions on issues related to Russia and Palestine, President Ramaphosa has a fine line to walk to appease Washington," Greeff added.
South Africa's foreign ministry responded to Trump on Monday by saying its expropriation act was not exceptional, while Ramaphosa said he would engage with Trump.
Except for PEPFAR aid, which constitutes 17% of South Africa's HIV/Aids programme, Ramaphosa said the United States did not provide any other significant funding.
South Africa's expropriation law aims to address racial disparities in land ownership, and special conditions have to be met before land is seized.
Trump imposed tariffs on Canada, China and Mexico at the weekend, sending global currencies to multi-year lows on Monday.
Reporting by Tannur Anders; Editing by Alexander Winning, Bernadette Baum and Barbara Lewis

Comments

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Bob 9 February 2025 04:35 PM

Ramaphosa would do well not to make disparaging comments on Trump s clampdown on ILLEGAL immigration. Also suggest he butts out of US internal and foreign affairs. He would also do well not to invent white scapegoats for something that is his own doing and we all knew was a long time coming.

Simon Hough 9 February 2025 10:10 PM

The downward spiral of our nations value continues, driven by a complete incompetent and corrupt government. Ramaposa is the worst democratically elected president this country has buy a massive margin. Devoid of the intellect to run a nation.

J dW 10 February 2025 01:29 AM

Daily Maverick's reporting on this has been woeful and shutting down the comments on their other articles shameful. Afriforum is being pilloried by DM and News24 who both gloss over the SA relationship with China, Russia and Iran that is the root cause of these funding cuts.