President Jacob Zuma's populist rhetoric on land reform is likely to scare away investment, even though there is little chance his words will result in action, BMI Research said this week.
"Investor sentiment is already weak in the face of sluggish growth and some decidedly investor "unfriendly" policies," the research firm said.
In his recent State of the Nation address, Zuma outlined plans for "radical economic transformation".
In March he said he wanted to make changes to the constitution to facilitate the process of land reform without compensation.
"To enact proposed changes, Zuma would need two-thirds of the legislature," BMI said.
BMI also noted that Zuma's proposed "precolonial audit of land ownership, use and occupation patterns" was unlikely to happen before his term has expired.
"While we do not envision near-term policy change, this shift towards more strident rhetoric will have consequences," BMI warned.
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