By Liesl Peyper and Suren Naidoo ·
South Africa received its first credit-rating upgrade from Fitch Ratings in almost 21 years on Friday, with the agency raising the country’s long-term foreign and local currency ratings by one notch to BB from BB-, while maintaining a stable outlook.
The upgrade places SA alongside only one other G20 country to receive a ratings upgrade from Fitch this year and marks a significant turnaround after years of downgrades by major ratings agencies.
Fitch notes the decision reflects SA’s record of prudent fiscal management and progress in fiscal consolidation despite weak economic growth and domestic and external or global shocks.
The agency also pointed to the country’s transition from primary fiscal deficits to consistent and widening primary surpluses, improved revenue collection, disciplined expenditure management and signs that government debt is stabilising.
It further highlighted the long average maturity of government debt – more than 10 years – and the relatively low share of foreign-currency-denominated debt as supportive factors.
Ongoing reforms in the energy and logistics sectors were also cited as likely to support economic growth in the coming years.
Other positive developments
The latest move adds to a series of positive credit ratings developments for SA over the past year.
In November 2025, S&P Global Ratings upgraded SA’s sovereign credit rating by one notch and retained its positive outlook. The agency reiterated its position in a statement last Friday, affirming SA’s BB+ local currency rating and retaining its positive outlook.
Moody’s, meanwhile, changed its outlook on SA’s sovereign credit rating from stable to positive, signalling the potential for an upgrade within the next 12 to 18 months.
All three major rating agencies now have South Africa on ‘BB’ or ‘Ba2’, which is two levels below investment grade.
SA’s National Treasury welcomed Fitch’s decision, describing it as evidence that fiscal consolidation efforts are gaining traction.
“Improved sovereign credit ratings help to lower borrowing costs for government, businesses and households and have tangible benefits for ordinary people,” says Treasury Director-General Duncan Pieterse.
“SA 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,” he adds.
Standard Bank Group’s chief economist Goolam Ballim on Friday hailed Fitch’s decision on SA’s improved fiscal position, especially in the context of the global economic uncertainty.
“Fitch’s upgrade is significant not only in its own right, but because it contains a degree of catch-up: All three major rating agencies are now aligned in their assessment of SA.
“More importantly, the direction of ratings travel has changed. After years focused on domestic macroeconomic stabilisation, SA appears to have reached a turning point toward growth,” Ballim tells Moneyweb.
He however called for the momentum to continue, for SA to exit junk status in the next couple of years.
“The next ambition must be achieving growth escape velocity through sustained reform and investment, which would create the conditions for further favourable ratings action and a return toward investment-grade status,” adds Ballim.
National Treasury, meanwhile says SA’s fiscal policy remains focused on stabilising and then reducing the debt-to-GDP ratio through growing primary budget surpluses, where revenue exceeds non-interest expenditure.
DG Pieterse stresses government intends embedding this approach in a fiscal anchor, with details expected to be announced in the 2026 Medium-Term Budget Policy Statement.
Moneyweb
