Ratings agency Moody’s expects SA’s economy to grow by less than 1.5% a year over the next two years, well below the nearly 5% forecast for Sub-Saharan Africa.
SA trails most of the continent, with only Botswana and Gabon also expected to expand by less than 3% over the period.
Moody’s set out its findings in a report on Sub-Saharan African sovereigns, saying credit fundamentals are expected to remain stable over the next 12 to 18 months. The region covers 25 countries with a combined population of about 980-million.
“The external growth environment has become less favourable than in our previous outlook. For most of Sub-Saharan Africa, the direct impact of US tariffs is likely to be minimal. We only expect changes in US tariffs to have some modest impact in SA,” said the agency, which rates SA Ba2 with a stable outlook. “Indirect effects including softer demand from key trading markets such as China will hurt growth.”
Moody’s forecast that median annual growth for the entire region would be about 4.7% over 2025-26, up from 3.8% of the past decade, “underpinned by solid domestic demand despite uncertain global conditions”.
“About 40% of the region’s economies will grow at least 6% annually,” Moody’s said, highlighting Rwanda (B2 negative), Ethiopia (Caa3 stable) and Senegal (B3 negative) as among the strongest performers. Mineral commodity producers are contributing more to growth, while ongoing large-scale infrastructure projects will further support economic activity.”
Moody’s said the outlook could improve if governments strengthened tax collection, managed debt more effectively and regained affordable access to global markets. Conversely, it could weaken if fiscal discipline slipped, borrowing costs rose or social unrest undermined creditworthiness.
The agency expects gradual progress in narrowing budget deficits, with about half of Sub-Saharan sovereigns projected to lift revenue by more than 1% of GDP in 2025-26. Still, high interest payments will continue to strain resources.
“Debt affordability will remain very restricted for a quarter of sovereigns. As fiscal positions strengthen and growth remains robust, debt ratios will decline in nearly two-thirds of countries,” the agency said.
Political, social and other constraints dampened the pace of improvements to credit fundamentals, the agency noted.
“In SA, 2026 local elections could test the coalition government’s stability,” it said. SA is listed alongside Cameroon, the Republic of the Congo and Uganda as nations where succession risks remain a concern.
Moody’s noted large-scale infrastructure projects, from railways and hydropower plants to airports and refineries, are providing fresh growth momentum across Sub-Saharan Africa.
East Africa is advancing multibillion-dollar rail schemes, while countries such as Angola and Ethiopia are pushing ahead with major energy investments. “Refinery rehabilitation and new construction are under way in Nigeria, Angola, Uganda and SA, which will substantially expand the continent’s refining capacity,” the agency said.
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