South Africa: Brexit volatility to hit investment flows, rand

After the landmark referendum in which voters in Britain decided to leave the European Union, questions are now being asked on what the consequences of the vote will have on South Africa’s economy.

The country’s Finance Minister, Pravin Gordhan on Sunday said financial market volatility caused by Britain’s decision to quit the European Union could hurt investment flows in the rainbow nation.

In his words, “We attract investment from countries like the UK and Germany and other countries in Europe and we don’t want this uncertainty to impact on investment decisions those big companies might be making in South Africa.”

The Brexit vote sent the South African rand tumbling at one point more than 8 percent before paring some of its losses, while government bonds and stocks were also plunged into a tailspin.

The local currency, the rand weakened against the dollar in early trade on Monday, local media reported.

The U.K. is the fourth-biggest destination of South African exports, according to official data.

Leader of South Africa’s opposition Democratic Alliance (DA), Mmusi Musimane, has asked embattled president Jacob Zuma to emulate the action of British Prime Minister, David Cameron, and to resign from office.

Zuma has been hit by a series of court indictments in the recent past, the last one came last week when a Pretoria High Court, dismissed an appeal by Zuma and the National Prosecuting Authority (NPA) relating to the need to reinstate over 700 corruption charges against him.