Johannesburg – Standard & Poor’s has upgraded South Africa’s sovereign credit rating for the first time in nearly two decades, citing improving economic growth and fiscal management. The agency raised South Africa’s foreign currency long-term rating to BB from BB- and its local currency rating to BB+ from BB. The outlook is positive.
The ratings agency also increased the country’s Transfer & Convertibility assessment to BBB- from BB+ while keeping short-term foreign and local currency ratings at B. National scale ratings remained at zaAAA/zaA-1+ for long- and short-term debt.
Economist Prof. Raymond Parsons from NWU Business School welcomed the move, noting it reflects recent fiscal improvements and growth prospects. He added that regaining full investment grade will require consistent economic reforms and disciplined policy implementation over the next few years.
S&P expects South Africa’s real GDP growth to rise to 1.1% in 2025, up from 0.5% in 2024, and average 1.5% over 2026-2028, supported by sectoral reforms, particularly in electricity. The agency anticipates the government will post its third consecutive year of primary surpluses, with contingent liabilities easing as state-owned enterprises such as Eskom require less financial support following its first profit in eight years.
The outlook remains positive but could be revised to stable if reforms stall, infrastructure pressures persist, or fiscal deficits grow. Conversely, faster fiscal consolidation and effective reforms could lead to further upgrades.
S&P noted that despite modest GDP growth and ongoing global trade risks, policy measures such as the new two-pot retirement system are expected to support household consumption, though per capita growth will remain below peer averages, keeping unemployment high at 33%.
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