According to the latest money market report by KSB, South African investors could be forced to scale down investments abroad. The company noted that figures released by South African authorities last week confirmed that South Africa was in recession.
“The challenges the economy of South Africa now faces are going to negatively affect the nation’s capacity to invest meaningfully in Zimbabwe.
South Africa is Zimbabwe’s largest trading partner and the country has pledged to pump in money into Zimbabwe.
KSB said the South African government and companies could put on hold plans to invest in Zimbabwe to focus on their own survival.
“Zimbabwe’s local industry will also face challenges in accessing lines of credit from South Africa’s financial institutions that were expected to play a key role in giving life-line lines of credit to the local industry.”
KSB said the value of Zimbabwean exports to South Africa was likely to fall due to reduced demand brought about by low spending power.