South Africa

Country risk

Country risk in South Africa is moderate. The OECD country credit grade is 4, akin to a sub-investment grade sovereign rating. This indicates a moderate likelihood that South Africa will be unable and/or unwilling to meet its external debt obligations. The ongoing challenging economic and fiscal environment 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 are somewhat weaker than peers.

The risk of expropriation is broadly in line with South Africa’s overall country risk rating. The US investment guide notes existing laws entitle the government to expropriate private property for reasons of public necessity or utility. At present, investors have the right to receive compensation following expropriation. A proposal to change the constitution to explicitly allow expropriation of land with no compensation did not pass parliament in December 2021.

South Africa scores in the top half of countries on all dimensions of governance, except political stability and absence of violence. Political risk in South Africa is moderate.