Why South Africans need USD diversification for wealth preservation

THE past month has seen both Moody's and Fitch Ratings publish their updated assessments of the South African economy.

- WILLEM J. OBERHOLZER

AS MOODY'S and Fitch deliver sobering assessments of South Africa's economic outlook, projecting growth of just 1-1.5% annually through 2027, South Africans face a critical wealth preservation challenge. With the rand prone to gradual depreciation against hard currencies, learn why diversifying into USD-based assets is no longer optional but essential for protecting your international purchasing power.

(JULIO CORTEZ AP)

Their conclusions, while diplomatically phrased, are sobering: South Africa’s growth is projected to hover between 1% and 1.5% over the next 12 months, weighed down by sluggish reform, elevated financing costs, and persistent structural bottlenecks in energy, logistics, and state-owned enterprises.

Moody’s has stressed that the country’s cost of capital remains stubbornly high relative to emerging market peers, reflecting both policy drift and weak private investment. While South Africa benefits from deep domestic capital markets and a credible central bank, Moody’s warns that unless reform momentum accelerates, the economy will remain trapped in a low-growth cycle.