South Africa is facing a double blow from internal political uncertainty and external headwinds, warned rating agency S&P Global Ratings, highlighting that it is monitoring whether the country’s coalition government will remain united and continue implementing the reforms that led to a credit rating upgrade last year.
According to Reuters, South Africa’s Constitutional Court paved the way on Friday (8) for an impeachment hearing related to President Cyril Ramaphosa’s conduct in the Phala Phala or “Farmgate” scandal, after a panel report concluded that the president must respond to allegations involving the theft of $580,000 in cash hidden in a sofa at his farm.
This development places the coalition government under renewed scrutiny, as rising oil prices and higher borrowing costs add pressure to the economy stemming from the conflict in the Middle East.
S&P’s Head of Africa Research and Analysis, Samira Mensah, told Reuters that the agency is monitoring “the strength of the coalition and its stability in order to assess its ability to carry out planned reforms.”
S&P upgraded South Africa’s credit rating for the first time in two decades in November last year, citing improved growth and fiscal trajectory. The agency’s outlook for African sovereign credit was positive at the start of 2026 after two years of rating improvements, although the Middle East conflict now represents a risk, according to Mensah.
More than three-quarters of rated African sovereigns are net importers of fuel and fertilisers, leaving countries such as Egypt, Mozambique and Rwanda more exposed to price increases triggered by the war, while exporters such as Nigeria and Angola are more shielded.
African countries spend, on average, about 17% of revenues on interest payments, compared to a global median of around 5.5%, leaving limited fiscal space to absorb external shocks.
Samira Mensah warned that governments that have recently removed fuel subsidies are now facing political pressure to reverse those reforms as the conflict continues.
Source: Diário Económico
