What would a Donald Trump victory mean for SA?

By Charlea Sieberhagen
09 November 2016

It's not long now until we find out who will win the historic election.

Would the effects of a Donald Trump presidency in the US be felt in SA?

The Republican candidate’s stance on economic and foreign policy is still quite vague, but one thing is clear -- if Trump wins, there will be repercussions in markets all over the world.

Dr Heinrich Bohlmann, senior lecturer of economics at the University of Pretoria, says that the poor performance of the stock market in the past week can be attributed to increase in support for Trump in opinion polls.

Read more: This is who’s currently leading in the US Presidential Election

“That suggests markets favour Clinton to win. Why? Simply put, there is a lot more policy uncertainty involved in the near term with a Trump presidency than a Clinton presidency.” And according to Bohlmann the financial markets and investors do not like uncertainty as it means more risk.

The rand was stronger on Monday after the FBI announced that they would not continue their investigation into Clinton’s private email server, reports Netwerk24. The JSE and other emerging markets improved after the announcement was made.

But how will the results of the election affect South Africans?

“In the near term, it will only affect those with wealth and large exposure to the stock markets. Longer term it obviously depends on who wins,” explains Bohlmann.

According to Heinrich the financial markets will recover if Hilary is elected. But if Trump succeeds, Heinrich says he expects a similar reaction to what happened after the Brexit vote shock.

Britain’s decision to exit the European Union earlier this year caught researchers and politicians off guard and caused uncertainty in the worlds financial and stock markets, reports Netwerk24.

“If Clinton wins, South Africans shouldn't expect any real change as her economic policies are not radically different to Obama's. If Trump wins, it is anybody's guess as his economic and foreign policy ideas are very vague.”

But Bohlmann says that South Africans shouldn’t count on who the leader of the US is to determine their fortunes, “but rather focus on electing good leaders themselves.”



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