News24 | Fitch upgrades SA for the first time in 21 years

Fitch has upgraded South Africa’s credit rating for the first time in almost 21 years, lauding its “prudent” management of government finances and progress in reining in state debt.

Fitch hiked South Africa’s Long-Term Issuer Default Ratings to “BB” from “BB-”, with a stable outlook. Treasury noted in a statement that South Africa is now only the second G20 country to be upgraded by Fitch this year.

Fitch noted that South Africa has achieved fiscal primary surpluses of 1% of GDP, on average, over the last four years. In addition, the US ratings agency expects stronger local economic growth.

“Supply-side constraints on economic activity, particularly the energy and logistics sectors that dragged on growth in recent years, have eased with the implementation of structural reforms, which should enable growth to moderately increase in the next years.”

Revenue could surprise to the upside due to high commodity prices, which have proven to be a significant source of fiscal revenue in past booms.

Fitch says that this will result in debt-to-GDP levels that will be “well below” what it previously expected when it downgraded SA to BB- in 2020.

In South Africa’s favour is that most of its debt is denominated in rand and that its bonds have long average maturities of more than 10 years.

Fitch is also relatively comfortable about local political risk:

“We believe President [Cyril] Ramaphosa will remain in office, despite an impeachment committee set up in May 2026, as we expect the ANC (40% of seats in Parliament) will remain supportive of the president,” it said.

It added: “Tensions within the ANC and the government of national unity (GNU) are likely to increase, with November 2026 municipal elections being a pressure point, but we expect the GNU to hold together for its full term.”

S&P Global Ratings upgraded South Africa’s rating by one notch in November 2025, while Moody’s put its rating on a positive outlook, which means its next move would most likely be an upgrade.

South African government bonds remain in junk territory, however, two levels below investment grade.

“South Africa still has some way to go to regain its investment grade credit rating, but for the first time in more than a decade, we are seeing a clear turnaround in the downward ratings trend. The turnaround is especially notable because it comes at a time when the global sovereign credit trend is overwhelmingly negative,” said Treasury’s director-general, Duncan Pieterse. Fitch has downgraded five countries with investment-grade ratings since the start of the US-Israel war on Iran.

“Im