Country risk in South Africa is moderate. The OECD country credit grade is 4, akin to a speculative grade sovereign rating. This indicates a moderate likelihood that South Africa will be unable and/or unwilling to meet its external debt obligations. The weak economic environment coupled with elevated political risk weigh on South Africa’s credit rating.
South Africa is ranked 84 out of 190 countries on the World Bank’s ease of doing business gauge. South Africa outperforms the regional average on most gauges of doing business but starting a business and trading across borders is somewhat weaker.
The risk of expropriation is broadly in line with South Africa’s overall country risk rating. The US investment guide does note that there has not been any expropriation of US assets since 1924. At present, investors have the right to receive compensation following expropriation. But potential amendments to the Constitution could allow for the expropriation of land without compensation.
South Africa scores in the top half of countries on all dimensions of governance, except political stability. Political risk in South Africa is moderate.