South Africa has secured its first sovereign credit upgrade in nearly 20 years after S&P Global raised its foreign currency long term rating to BB from BB-, citing stronger growth prospects, a firmer fiscal trajectory and reduced risks at power utility Eskom.
The decision follows Treasury’s push to rein in debt and restore fiscal credibility. A recent mid term budget review showed debt stabilising at 77.9 percent of GDP this year, with the deficit set to narrow to 4.7 percent in 2025 to 2026. Gains at state owned power and freight agencies have added momentum to the reform drive.
S&P forecasts GDP growth of 1.1 percent in 2025, up from 0.5 percent this year, and expects an average of 1.5 percent through 2026 to 2028. Early fiscal 2025 revenue has exceeded targets and the agency anticipates continued primary surpluses and consolidation.
The country remains two notches below investment grade after its 2017 downgrade following the removal of finance minister Pravin Gordhan. S&P maintained a positive outlook.
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