Business
Ramaphosa warned as investor confidence hangs on military control
Another warning for Ramaphosa as investor nerves resurface
For a while, it looked like South Africa was finally catching a break.
Business confidence had been inching upward, sentiment surveys were showing cautious optimism, and investors appeared willing to give the country another look going into 2026. But that fragile calm is now under threat, and this time the concern is not load shedding or policy delays. It is something far more fundamental.
President Cyril Ramaphosa has been warned that uncertainty over his control of the armed forces could rapidly spook investors and undo recent gains in confidence.
Why investors are suddenly paying attention
The warning comes from Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research. She says business confidence has improved recently, but the improvement sits on shaky ground.
From an investor’s point of view, civilian control over the military is not a nice-to-have. It is a basic assumption. Once that assumption is questioned, risk calculations change quickly.
According to IJssel de Schepper, investors are unlikely to commit capital in a country where there is uncertainty about whether the president can enforce instructions within the defence force. It is not the kind of risk they expected to be factoring in as South Africa heads toward 2026.
The naval exercise that raised eyebrows
The concern follows reports of disorderly conduct within the South African National Defence Force after a controversial naval exercise near Cape Town earlier this year.
In early November, a clear instruction was reportedly issued during an interdepartmental meeting involving the presidency, International Relations and Defence. Iran was not to take part in a Chinese-led naval exercise at Simon’s Town in any capacity, not even as an observer.
Despite this, Iran did participate.
One senior source described the outcome as blatant defiance by SANDF chief General Rudzani Maphwanya and navy chief Vice Admiral Monde Lobese. The incident immediately raised uncomfortable questions about who ultimately calls the shots.
Time is not on Ramaphosa’s side
After Iran’s participation was confirmed, Defence Minister Angie Motshekga announced in January that a board of inquiry would be established to investigate why the president’s instruction was ignored.
But economists warn that investigations alone may not be enough.
IJssel de Schepper says the president has a very short window to deal with the matter decisively and transparently. If there is no clarity, no accountability, and no visible consequences, investor confidence could evaporate as quickly as it appeared, including in fourth-quarter confidence indicators.
In her view, heads need to roll, and lines of authority need to be unmistakably clear.
A bigger geopolitical worry
The issue does not exist in isolation.
South Africa’s growing military engagement with Russia, China, and Iran has already unsettled parts of the investment community. When that is combined with doubts about civilian oversight of the defence force, the concern becomes far more serious.
This kind of uncertainty feeds directly into how investors assess long-term stability, the cost of capital, and overall risk. Matters like the rule of law and civilian control of the military should be givens, not variables that need to be reassessed.
A risk and an opportunity
There is, however, a flip side.
Decisive action by President Ramaphosa could have a strongly positive effect. A clear demonstration of control and accountability would go a long way toward reassuring investors that South Africa’s institutional foundations remain intact.
If that happens, this episode could fade quickly from investor thinking. If it does not, a concern that barely featured on risk radars until recently could become a central question hanging over the economy.
Right now, the message from economists is blunt. Confidence is fragile, time is short, and the stakes are higher than they first appear.
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Source: Business Tech
Featured Image: Polity.org.za
