South Africa faces a period of political and economic uncertainty which will only be aggravated by policy moves from the U.S. Federal Reserve, according to Martina Bozadzhieva, managing director of EMEA research at advisory firm Frontier Strategy Group.
"There is a political struggle there for sure, and there is also a struggle over government policy," she told CNBC Friday.
Earlier this week it was announced that South Africa's Finance Minister Pravin Gordhan had been called to appear in front of investigative police in the country, concerning allegations of a connection to a spy unit during his time as head of South Africa's tax authority. The rand fell sharply against the dollar on the news.
Many suspect that the arrest is politically motivated following his disagreements with President Jacob Zuma. Gordhan's management is thought to be soothing South Africa's volatile economy, and he is committed to cutting the country's budget deficit.
But, in light of Gordhan's recent troubles, a Reuters poll conducted just days after news of his summoning indicated that South Africa's credit rating is likely to be cut to "junk" status this year. Added to this, Bozadzhieva said that a U.S. interest rate hike would exacerbate the rand's volatility.