Country risk in South Africa is moderate with an OECD country credit grade of 4. This is akin to a speculative grade sovereign rating, which 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 have weighed on South Africa’s credit rating.
The World Bank’s ease of doing business gauge—which attempts to measure regulation and red tape relevant to a domestic small to mid-sized firm—ranks South Africa’s business climate 82 out of 190 economies. South Africa outperforms the regional average on most gauges of doing business but starting a business and trading across borders remains poor. 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 post 1924. However, the current Expropriation Bill before Parliament would allow the government to expropriate land without need for a court order or 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.