South Africa is in danger of being left behind by faster-growing African peers, a new S&P Global Ratings report says, as the country’s weak growth and entrenched structural problems leave it vulnerable.
This is so as the continent posts the strongest recovery among emerging markets.
S&P projects a median growth rate of 4.5% for Africa in 2026-28 driven by commodity windfalls, currency gains and renewed portfolio inflows.
South Africa, by contrast, is near the bottom of the continent’s growth distribution, with forecasts clustered in the low single digits.
“Almost 90% of African economies will grow faster than in the last five years. However, this ranges from 9.5% in Guinea to 1.5% in South Africa,” S&P said in a report, “Africa at the crossroads”, released this week.
The gap heaps pressure on President Cyril Ramaphosa to show the result of structural reforms aimed at bringing more private capital into the power sector, unclogging logistics and ports and unlocking private sector investment to create jobs and lift productivity.
S&P’s analysis for the continent corroborates the IMF and World Bank’s forecasts, with the former projecting Sub-Saharan Africa growth at just more than 4% in 2025-26 and the latter estimating 4.3% for the next two years.
Narrow tailwinds
The report shows that the continent’s momentum is being driven by a narrow set of tailwinds — record gold prices, surging metals and a wave of portfolio capital — rather than broad-based structural transformation.
“Strong demand has pushed gold prices to all-time highs, albeit with some correction lately. High prices are supporting the current accounts and exchange rates of many gold producers,” S&P said.
“Currencies of some major gold exporters are among the best-performing ones against the US dollar, year to date.”
Gold prices are up more than 50% so far this year, boosting producers such as Burkina Faso, Ghana, Chad and South Africa. Most African currencies have strengthened against the dollar, gaining on average about 6% so far this year and reflecting a mix of portfolio flows, commodity price shifts, a weaker dollar and domestic supply-side conditions.
That combination has eased imported inflation in many African countries and improved external positions for commodity exporters. Still, the ratings house warned that these gains are fragile. Oil prices have weakened and rising US tariffs and geopolitical frictions are cited as downside risks that could reverse improvements for vulnerable economies.
“US trade and customs data shows a significant increase in tariffs collected from most African countries, which will be compounded by the higher tariffs effective from August and the expiry of the African Growth and Opportunity Act,” S&P said.
“However, low trade exposure to the US and tariff exemptions should mitigate the direct impact of increasing protectionism.”
S&P’s analysis matters because it is one of the most important arbiters of the cost of capital for the continent, which is up in arms over what it perceives as bias in how ratings houses set risk assessments.
The report added demographics as a long-term dimension that could shape the continent’s prospects. It estimates the continent’s population will double by 2065 and account for about three-quarters of global population growth, bucking the global ageing trend and potentially becoming an engine for demand and labour supply.
Technology could be another game changer, S&P said, noting uneven but growing adoption of AI across the continent. The median user share in Africa is less than 9%, and trails other regions, but wider diffusion could lift productivity and business efficiencies.
