JOHANNESBURG, South Africa — November 14, 2025 – South Africa received its first credit rating upgrade in two decades, reflecting a positive economic recovery forecast and progress on fiscal reforms. S&P Global Ratings raised the nation’s rating from BB- to BB, maintaining a positive outlook as prospects for further credit rating improvement continue.
Strong Fiscal Measures and Debt Reduction
S&P cited improvements in the performance of state-owned utility Eskom Holdings, which posted its first profit in eight years, reducing reliance on government support. Analysts Ravi Bhatia and Benjamin Young noted that South Africa is on track to post its third consecutive annual primary surplus. These developments signal ongoing government debt reduction and a stronger fiscal trajectory.
Finance Minister Enoch Godongwana’s medium-term budget highlighted improved revenue collection and projected that government debt will peak at 77.9% of GDP for the fiscal year ending March, slightly higher than previous estimates due to the formal adoption of a 3% inflation target. This move supports the Reserve Bank’s goal of price stability, strengthening investor confidence.
Boosting Investor Confidence
The upgrade has fueled positive market sentiment, with South Africa’s 10-year government bond yield falling 115 basis points to 8.65%. Investors are responding to the country’s fiscal discipline and commitment to reforms, including plans to finalize a fiscal anchor next year — a key step in reducing debt-service costs and achieving long-term economic recovery forecast targets.
Looking Ahead
The government’s focus on maintaining a primary surplus and reducing Eskom’s contingent liabilities reflects sustained progress toward government debt reduction and continued credit rating improvement. These efforts are expected to enhance South Africa’s financial stability and resilience, offering confidence to both domestic and international investors.
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This story was first reported by S&P Global. Read the full article here.
