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Goldman now sees two 2026 South Africa rate hikes because of war

Goldman Sachs expects South Africa to raise interest rates twice this year after previously seeing a series of cuts, as the Iran war fans inflation risks around the world.

The bank forecasts quarter-point increases at the central bank's meetings in May and July, after raising its oil-price and inflation assumptions in response to ongoing tensions in the Middle East, Goldman economist Andrew Matheny said in an interview.

"We have shifted to a baseline for two rate hikes," Matheny said, adding that the likelihood of larger half-point increases remained "quite low."

"Prior to the Iran war, we had been forecasting rate cuts at alternating meetings down to a 5% terminal rate," he said, implying 75 basis points of easing in 2026. Goldman still sees the central bank lowering the policy rate to 5% — arriving there in 2029 — but now has "50 basis points of hikes before returning to a structural cutting cycle."

South African Reserve Bank Governor Lesetja Kganyago and his colleagues held interest rates at 6.75% at the last monetary policy committee meeting in March, while warning that the risks to price pressures had risen since the US and Israel attacked Iran on February 28. The MPC will deliver its next policy decision on May 28.

Matheny now expects South African inflation to average 4% this year, before slowing to 3.4% in 2027, with price growth likely to hover between 4% and 4.5% over the coming quarters.

That could bring added pressure to bear on the SARB to tighten as policymakers seek to guide inflation down to the 3% target they adopted last year, potentially making them more sensitive to supply-driven price shocks.

The longer the Iran conflict drags on, the greater the risk that higher diesel and fertiliser costs spill into broader food inflation, Matheny said.

While he described the case for tightening as "borderline," he said persistent inflation risks now tilt the balance toward additional hikes.

The more hawkish monetary policy outlook comes even as Goldman maintains a constructive view on South Africa's sovereign credit trajectory and broader economy.

"The positive fiscal story is still intact," he said.

Goldman estimates South Africa's budget deficit narrowed to 4.3% of gross domestic product in the fiscal year through March, outperforming the National Treasury's February projection of 4.5%, while the country posted a primary surplus for a third consecutive year.

That fiscal out-performance may support sovereign credit-rating upgrades over the coming months, according to Matheny.

Matheny said Moody's Ratings may revise South Africa's outlook to positive at its review expected next week, while S&P Global Ratings could ultimately raise the country's rating to BB+ — one notch below investment grade — if the global economy avoids a deeper slowdown linked to the Iran conflict.

Goldman's baseline view is that disruptions to oil flows ease by the end of June, allowing crude prices to moderate to about $90 a barrel by year-end. But the bank warned risks remain skewed upward, with more adverse scenarios placing oil between $100 and $115 a barrel.

Even so, it doesn't currently see the Iran war triggering a global recession and recently lowered its probability for a US downturn.

Provided the global economy remains intact, Matheny said markets may still be underpricing South Africa's improving ratings momentum.

Impeachment or GNU: Hill-Lewis says no trade-off for accountability in government

Despite being in a crucial coalition alliance with President Cyril Ramaphosa's African National Congress (ANC), Democratic Alliance (DA) leader Geordin Hill-Lewis is clear that there will be no trade-off for accountability or integrity in government under his leadership.

Speaking exclusively with Polity about the DA's policies and political developments in South Africa ahead of the 2026 municipal elections, Hill-Lewis said there was no balance being sought between his party's commitment to accountable governance and its role as a Government of National Unity (GNU) partner.

This as Ramaphosa faces the possibility of impeachment as the National Assembly initiates a process to establish an Impeachment Committee after the Constitutional Court found that the previous parliamentary vote, which halted an impeachment inquiry against Ramaphosa, violated the National Assembly's constitutional obligations under Section 89 of the Constitution.

When asked about the DA's position on the matter, Hill-Lewis said his party's vision of building a successful country was much bigger than government.

"[It] isn't just about me. It's not about the President. It's not about this government. It's bigger than all of us. And so we have to stand very firmly for some of the principles on which successful societies are built. And one of them is accountability and integrity in the State.

"And so that's not something that we will trade off, not for political convenience, not ever. And so if it comes to that, you know, I've made it clear that we will participate fully in the Impeachment Committee, but we will not be part of turning a blind eye to wrongdoing," he said firmly.

And the way in which Hill-Lewis plans to execute his party's vision for a successful South Africa is through his position in government.

He reiterated his plan to stay on as Cape Town mayor, while heading up the country's second largest political party, a dual role that he believes he can successfully pull off by being "deliberate and intentional" with his time, splitting off his weekdays in the mayoral office and campaigning for his party on the weekends.

"And I look forward to trying to do both," he said, noting that as his party grows, those who grew with it would face the same responsibilities.

NOT A 'WHITE PARTY'

In his dual role as DA leader and Cape Town mayor, Hill-Lewis further aims to leverage his position in government to grow the DA's voter base, with a focus on those who have previously not voted for the party, owing to what he describes as "literally two decades or more of propaganda about what the DA will do when we get into government and who we will govern for…"

He acknowledged that expanding the DA voter base was the party's biggest challenge, and one that he had committed himself to working on over the next few years.

"…the most important leverage is your position in government, actually. So, you know, that's one of the reasons I thought it was important to stay [as mayor], because I can show very practically on a day-to-day basis that we are governing, I'm governing for everyone, that everyone benefits when the basics work, where cities function and succeed. And in fact, the people that benefit the most are the poorest because they rely on functional public services more than the wealthy," he rationalised.

He punted the DA's biggest strength as its track record in governance, while stressing that the DA's focus was not solely on Cape Town, with the party's sights firmly set on Johannesburg, Tshwane and Ekurhuleni to prove to South African voters that the DA would work for the benefit of everybody and not just one race.

"Then you start to chip away. You take a 10 pound hammer to that label that, you know, that perception. Similarly with the Government of National Unity. So in the portfolios that we are responsible for, we're not responsible for the whole government, but we are responsib...

Ramaphosa fires Social Development Minister

President Cyril Ramaphosa on Thursday dismissed Sisisi Tolashe as Minister of Social Development, after widespread calls for her removal.

Minister in the Presidency for Women, Youth and Persons with Disabilities Sindisiwe Chikunga will take on the role of acting Minister, pending a full-time appointment, the Presidency said.

Tolashe is accused of not declaring two luxury vehicles received for the African National Congress Women's League, which she heads up.

Last month, ActionSA opened a criminal case against Tolashe for corruption, submitted a complaint to the Public Protector for breaches of the Executive Members' Ethics Act, and laid a formal complaint with Parliament's Ethics Committee for breaches of the Code of Conduct and Disclosure of Members' Interests.

The Democratic Alliance (DA) welcomed Tolashe's removal, describing her position in the Cabinet as "untenable".

It noted Chikunga's interim appointment but said an appointment must be made urgently.

"South Africans deserve a competent and credible Minister who can lead this critical department with integrity, stability and a clear focus on serving vulnerable people who depend on its support," DA leader Geordin Hill-Lewis said.

The African National Congress said Ramaphosa's decision to remove Tolashe showed the party and President's seriousness in tackling corruption.

Ramaphosa, himself faces the possibility of impeachment as the National Assembly initiates a process to establish an Impeachment Committee after the Constitutional Court found that the previous parliamentary vote, which halted an impeachment inquiry against Ramaphosa related to the Phala Phala matter, violated the National Assembly's constitutional obligations under Section 89 of the Constitution.

"Under President Ramaphosa's leadership, the fight against corruption has moved beyond rhetoric into concrete action through strengthened law enforcement institutions, the signing of numerous SIU proclamations, support for independent investigations, and the implementation of organisational renewal processes aimed at building a capable, ethical and developmental state. The President continues to lead from the front in ensuring accountability, transparency and consequence management across government," the party said in a statement through spokesperson Mahlengi Bhengu.

Ramaphosa signals 'definitive' economic turnaround from sustained growth

President Cyril Ramaphosa declared on Wednesday that South Africa's economy is entering a "definitive period of recovery", citing four consecutive quarters of economic growth, extending into early 2026.

Speaking at the BlackRock Infrastructure Investment Conference in Cape Town, Ramaphosa acknowledged severe factors that previously constrained national growth such as State capture, an energy crisis, the Covid-19 pandemic, and ongoing global economic volatility.

Despite these challenges, Ramaphosa emphasised that an intensive eight-year government strategy to revive critical network industries and restore institutional stability was finally yielding tangible results.

He highlighted several major milestones indicating a structural turnaround for the nation's financial standing, noting that South Africa's sovereign credit rating had been officially upgraded by international rating agencies.

He pointed out that the country successfully secured its removal from the Financial Action Task Force grey list last year and that the national fiscal position was on track to record its third consecutive primary budget surplus.

He said government was steadily stabilising the sovereign debt burden with a path toward sustainable long-term debt levels.

While celebrating the consecutive quarters of GDP growth, Ramaphosa remained pragmatic about the domestic labour market, noting that the country had "yet to see this translate into a meaningful rise in employment".

Statistics South Africa announced on Tuesday that in the first quarter of 2026 the country's unemployment rate rose to 32.7%, up from 31.4% in the fourth quarter of 2025.

Meanwhile, to counter persistent global risks, Ramaphosa said government was "actively maintaining a unified front" with the South African Reserve Bank, affirming a strict alignment on containing inflation, which faces renewed pressure from escalating geopolitical conflicts in the Middle East.

Moving forward, the State's economic strategy would focus heavily on optimising public spending efficiency, he said.

This aims to free up vital resources for aggressive infrastructure investment while securely sustaining the country's social wage.

Ramaphosa said South Africa had entered a phase of immense economic potential as its structural reform agenda gathered pace and he believed that these changes were solidifying the nation's reputation as a "premier destination for capital within emerging markets".

GROWTH AND SOVEREIGN UPGRADES

The President attributed the renewed economic momentum to the 2018 Investment Conference investment drive, which secured R1.5-trillion in commitments across sectors such as energy and manufacturing.

Building on that foundation, South Africa recently achieved a record R890-billion in pledges at its sixth Investment Conference.

With this upward trajectory, the government had set an ambitious new target to attract R3-trillion over the next five years, earmarked for job creation, infrastructure development, and rolling renewable energy projects.

According to Ramaphosa, the national strategy focused intensely on high-growth sectors such as green industrialisation and digital infrastructure, with a special emphasis on leveraging the country's rich reserves of critical minerals to drive local economic growth.

"We aim to double fixed investment to over 30% of GDP, bridging the gap between positive sentiment and active capital deployment to drive sustainable growth," Ramaphosa explained.

Over the next three years, government had planned more than R1-trillion in public sector investment for modernising ports, upgrading freight rail networks, and improving key road corridors.

"Furthermore, we are tackling the energy crisis by reforming Eskom, expanding generation capacity, enhancing the grid, and positioning the country as a leader in renewable energy and green hydrogen.

"To ensure long-term development over the next decade, the State...

S&P says it is watching South Africa coalition, Middle East conflict risks for wider Africa

South Africa faces a double blow from domestic political uncertainty and external headwinds, S&P Global Ratings said, adding that it is monitoring whether the country's coalition government can hold together and sustain the reforms behind last year's credit rating upgrade.

South Africa's Constitutional Court cleared the path on Friday for an impeachment hearing into President Cyril Ramaphosa's conduct in the Phala Phala scandal, after a panel report found he had a case to answer over the theft of $580 000 in cash hidden in a sofa at his farm.

The development puts fresh scrutiny on the coalition government as rising oil prices and borrowing costs add to the pressure on the economy from the Middle East conflict.

S&P's Samira Mensah, head of analytics and research for Africa, told Reuters S&P is watching "the strength of that coalition, the stability of the coalition to be able to carry on reforms and support the momentum."

S&P lifted South Africa's credit rating for the first time in two decades in November, citing the nation's improving growth and fiscal trajectory.

S&P's outlook for African sovereign credit was positive at the start of 2026 after two years of ratings improvements, though the Middle East conflict now poses a risk, Mensah said.

More than three-quarters of rated African sovereigns are net importers of fuel and fertiliser, leaving countries such as Egypt, Mozambique and Rwanda most exposed to war-driven price rises, while exporters like Nigeria and Angola are better insulated.

African sovereigns spend on average around 17% of revenues on interest payments, compared to a global median of around 5.5%, leaving little fiscal space to cushion external shocks.

Mensah warned that governments that have recently removed fuel subsidies face political pressure to reverse those reforms the longer the conflict continues.

ActionSA files perjury, fraud charges against Ramaphosa

ActionSA has officially laid criminal charges against President Cyril Ramaphosa in the ongoing Phala Phala farm theft saga, alleging a deep-seated cover-up and the under-reporting of stolen funds.

The criminal charges, filed at the Bela-Bela Police Station, in Limpopo, are of perjury and fraud and allege that Section 34(1)(b) of the Prevention and Combating of Corrupt Activities Act 12 of 2004 (PRECCA) was contravened.

The charges arise from reports indicating that at least R15-million of Ramaphosa's money was stolen from his Phala Phala farm, rather than the widely reported $580 000 (roughly R8.75-million at the time of the burglary).

Last week, the Constitutional Court revived the Phala Phala saga by declaring that the previous parliamentary process used to shield the President was unconstitutional.

ActionSA asserted that Ramaphosa deliberately failed to disclose the true, higher amount of money that was stolen and added that cash flow analyses conducted by the National Prosecuting Authority (NPA) on one of the accused have raised further questions regarding the true extent of the funds.

ActionSA Parliamentary Chief Whip Lerato Ngobeni argued that this reinforces the party's long-standing position that the South African public has not been told the full truth about the Phala Phala scandal.

ActionSA contended that under Section 34 of PRECCA, there is a clear legal obligation for individuals in positions of authority to report corruption and related offences involving amounts above the prescribed threshold.

Ngobeni pointed out that a deliberate failure to accurately disclose material information regarding such offences poses severe legal and constitutional concerns.

The party stated that misrepresentations under oath regarding the stolen money, under the guise of protecting the Presidency, may amount to perjury and fraud.

"The rule of law must apply equally to all, including the President of the Republic. The Presidency cannot become insulated from scrutiny simply because accountability becomes politically inconvenient. South Africans deserve the truth, and the institutions tasked with uncovering that truth must be allowed to function freely, independently, and without fear, favour, or political interference," Ngobeni said.

ActionSA moves to formally charge Ramaphosa over R15m Phala Phala scandal

ActionSA leadership will on Wednesday formally lay criminal charges against President Cyril Ramaphosa following explosive revelations regarding the true scale of the theft from his Phala Phala farm in February 2020.

The charges, which threaten to severely disrupt the political landscape, arise from reports indicating that at least R15-million was stolen, rather than the widely reported $580 000 (roughly R8.75-million at the time of the burglary).

ActionSA has confirmed that the charges will include a violation of the Prevention and Combating of Corrupt Activities Act, No 12 of 2004.

The party asserted that Ramaphosa deliberately failed to disclose the true, higher amount of money that was stolen from his Limpopo farm.

Further charges of perjury and fraud will be laid, stemming from allegations that the President made false statements regarding the precise amount of money stolen.

This move follows a significant Constitutional Court ruling last week, which effectively revived the Phala Phala saga by declaring the previous parliamentary process used to shield the President unconstitutional.

With the African National Congress no longer holding an outright majority in Parliament, ActionSA is accelerating its efforts to hold the executive accountable.

The party, along with other opposition members, has vowed to use all available constitutional mechanisms to ensure that no one, including the President, is above the law.

The formal laying of charges will be led by ActionSA national chairperson Michael Beaumont, Parliamentary Chief Whip Lerato Ngobeni and Limpopo provincial chairperson Victor Mothemela.

ActionSA maintained that the new evidence, which included forensic investigations indicating the theft of more than R15-million showed that the South African public had only been fed partial truths, demanding a full, transparent criminal investigation.

Ramaphosa refuses to resign over Phala Phala as Labour Party demands systemic overhaul

Political parties have reacted to President Cyril Ramaphosa's address on the Constitutional Court judgment in the Phala Phala matter, with the Labour Party of South Africa urging for a structural rest, while other political parties expressed mixed demands for immediate accountability and acknowledgement of Ramaphosa's right to legal review.

In a televised address on Monday, Ramaphosa declared he will not resign, despite calls to do so following a Constitutional Court ruling.

He stated the ruling regarding his Phala Phala farm scandal does not compel him to resign, promising to take the Independent Panel report on review to stop it from proceeding to an Impeachment Committee.

Ramaphosa announced that his legal team had advised him to take the independent panel report, which he described as "deeply flawed", on judicial review, aiming to stop it from proceeding to a full impeachment committee.

The address followed a Constitutional Court ruling on May 8, which found that the National Assembly acted illegally in 2022 when it voted against adopting a report regarding the Phala Phala farm theft.

On Monday, National Assembly Speaker Thoko Didiza initiated the process to establish an impeachment committee to investigate Ramaphosa regarding the Phala Phala scandal.

The Labour Party of South Africa has strongly condemned Ramaphosa's actions, calling for a total overhaul of the country's political system.

The party argued that the judgment exposed the "structural weaknesses" of the current system, where the President was protected by party majorities in Parliament.

The Labour Party called for a system where the State President was elected directly by the people, rather than through Parliament, and urged for the removal of reliance on party political structures for accountability.

Labour Party interim president Joseph Mathunjwa stated that the repeated crises, from Jacob Zuma to Ramaphosa, showed that the current parliamentary democracy had failed.

MIXED REACTIONS

The Democratic Alliance (DA) welcomed the ruling, warning that the review must not be used to delay the work of Parliament.

DA leader Geordin Hill-Lewis called on Parliament to handle the matter "lawfully, transparently and with the constitutional seriousness" it deserves, noting that Ramaphosa's decision to take the Section 89 Panel Report on review must not be used to delay the work of Parliament.

"… this remains an African National Congress- (ANC-) made crisis, rooted in serious unanswered questions about the President's conduct and the ANC's long record of shielding its own leaders from accountability," he said.

Hill-Lewis explained that Ramaphosa should bring any review application with due haste and on an expedited basis, so that the legal position is clarified quickly and this matter is not delayed unnecessarily.

He urged Parliament to take urgent legal advice on the implications of the President's incoming review, including whether it affects the establishment and work of the Impeachment Committee, or whether the committee may proceed while the review is underway.

"Given the serious constitutional consequences of this matter, and the massive public interest in it, Parliament must take the South African people into its confidence by sharing that legal advice once it receives it," he said.

ActionSA Parliamentary Chief Whip Lerato Ngobeni said while every person had the right to approach the courts, Ramaphosa cannot use litigation as a shield against political accountability.

She explained that South Africans deserved full transparency and accountability regarding the millions of rand concealed at Phala Phala, the burglary itself, and the conduct that followed thereafter.

ActionSA will therefore formally write to the Speaker of the National Assembly calling on Parliament to proceed without delay in implementing the Constitutional Court ruling and constituting the Section 89 impeachment ...

South Africa's official unemployment rate rises to 32.7% in first quarter

South Africa's official unemployment rate rose to 32.7% in the first quarter of 2026 from 31.4% in the fourth quarter of 2025, data from the statistics agency showed on Tuesday.

Statistics South Africa said the number of unemployed people increased to 8.14-million in January to March, compared to 7.84-million in October to December.

The official jobless rate has been above 30% for more than five years and is among the highest in the world.

The coalition government formed in 2024 has struggled to meaningfully boost job creation, despite investor optimism about reforms and a modest pickup in economic growth.

Job losses were broad-based in the first three months of this year, with only three out of ten sectors tracked by Stats SA recording job gains.

The community and social services sector had the biggest number of job losses in the first quarter of 2026.

Manufacturing, mining and agriculture saw employment increases.

An expanded definition of unemployment rose to 43.7% in the first quarter from 42.1% previously.

Young people and Black women remain especially vulnerable to unemployment in South Africa.

Ramaphosa warns against illegal searches and 'opportunists' who target foreign nationals

President Cyril Ramaphosa on Monday condemned the recent surge of violent protests and criminality targeting foreign nationals, declaring that such acts do not represent the views of South Africans or the policy of the government.

In his weekly letter to the nation, Ramaphosa addressed the rising tensions in parts of the country, arguing that the violence is being driven by "opportunists" who are exploiting legitimate grievances, particularly among the poor, under the pretext of community activism.

He condemned vigilante tactics, such as individuals or groups stopping people to check identification and conduct searches of private property.

"Some of these people are assuming functions that only State officials are permitted to perform... Such lawlessness will not be tolerated, regardless of who the perpetrators or victims are," he stated.

Ramaphosa emphasised that everyone in South Africa is bound by the same laws, regardless of their status.

While condemning the violence, which has drawn concern from other African nations, Ramaphosa acknowledged the legitimacy of concerns surrounding illegal immigration and its impact on social stability, governance, and national security.

He noted that undocumented migration creates strain on essential public services like healthcare, housing, and municipalities, particularly in disadvantaged communities.

Furthermore, he highlighted that the exploitation of undocumented, cheaper foreign labour by some employers in high-unemployment sectors is "fuelling social tension" and "eroding the hard-won rights of workers".

Ramaphosa reaffirmed that the government is committed to acting "decisively" against undocumented migration but stressed that this must be done within the confines of the law.

"Not only is this fuelling social tension, but it is also actively undermining our labour protection regime and eroding the hard-won rights of workers," he said.

Ramaphosa highlighted that the government is navigating constitutional and international obligations to secure South Africa's borders.

He commended the Border Management Authority (BMA) and the South African National Defence Force for their intensified efforts to combat illicit cross-border activities.

"We commend the BMA for successfully intercepting some 450 000 people trying to enter South Africa illegally in the past financial year," Ramaphosa announced, marking a significant milestone in border control.

Furthermore, as government strengthens the physical borders, it is also reforming its migration and citizenship framework, he assured.

The President announced that, following promises made in the State of the Nation Address, the Department of Labour and Employment is in the process of hiring up to 10 000 inspectors.

Ramaphosa sent a strong, uncompromising message to businesses, emphasising that the government will not tolerate the exploitation of undocumented labour.

"We are stepping up workplace enforcement... We will ensure that employers that hire foreign nationals without the required visas face the full might of the law," he warned, citing that illegal immigration poses a risk to security, stability, and economic progress.

Ramaphosa also warned against citizens engaging in, or benefiting from, illegal activity, calling it a "society-wide challenge". He highlighted the issue of sham marriages used for immigration fraud, the illegal sale of State-subsidised housing and accepting bribes to facilitate access to social services.

While clamping down on illegality, Ramaphosa urged citizens to maintain solidarity with the rest of Africa.

He stated that isolated criminal acts should not be allowed to define South Africa's relations or damage the country's international reputation.

He stated that the country has a strong refugee protection framework that prioritises the integration of persons displaced by conflict, war, and persecution.

"In South Africa, refugees...