Wall Street Misprices South Africa’s Collapse

Excerpt

A reckoning is coming for South Africa. The Trump administration sees it. So does Congress. But financial markets don’t—and that’s a problem.

Multinationals and finance houses recognize South Africa’s deteriorating domestic conditions: youth unemployment above 60%, frequent power and water outages, and failing state-owned enterprises. But they haven’t priced in sanctions and compliance risks stemming from Pretoria’s foreign alignments and collapsing standing in Washington. South Africa’s rand is one of the world’s most volatile currencies, yet its modest 4.28% dip against the U.S. dollar since the beginning of President Trump’s second term doesn’t capture the scale of Pretoria’s increasing isolation.

Mr. Meizlish is a senior research analyst at the Foundation for Defense of Democracies. He has worked in the U.S. Treasury’s Office of Foreign Assets Control.