S&P Global Ratings has reaffirmed South Africa’s sovereign credit ratings and maintained a positive outlook, citing improving public finances, sustained fiscal discipline and progress on economic reforms despite a challenging global environment.
The ratings agency kept South Africa’s long-term foreign-currency sovereign rating at BB and its local-currency rating at BB+, according to a statement issued over the weekend.
The decision reinforces the upgrade S&P granted in November 2025, the first sovereign ratings upgrade for South Africa by a major credit ratings agency in more than 16 years.
The latest assessment follows a similar move by Moody’s Ratings, which last week revised South Africa’s outlook from stable to positive, adding to signs of growing confidence among investors and credit analysts in the country’s fiscal trajectory.
South Africa’s Treasury welcomed the decision, saying it reflected progress made in stabilising public finances and implementing structural reforms aimed at boosting economic growth.
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National Treasury Director-General Duncan Pieterse said the positive outlooks from both S&P and Moody’s underscored the country’s potential to strengthen economic performance while reducing debt levels.
“Two of the major rating agencies, S&P and Moody’s, now have South Africa on a positive outlook, which is an encouraging signal that we have the potential to lift our economic growth rate higher and reduce our public debt faster. We are determined to do so,” Pieterse said.
S&P noted that stronger-than-anticipated government revenue collection during the 2025/26 fiscal year had helped South Africa record a third consecutive primary budget surplus, a measure that excludes debt-servicing costs and is widely viewed as an indicator of fiscal sustainability.
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The agency said expenditure controls and improved budget management had reinforced its assessment that the country’s debt burden is beginning to stabilise after years of steady increases.
According to S&P’s projections, general government debt peaked at around 79 percent of gross domestic product in 2025 and is expected to gradually decline to approximately 78 percent by 2029 as fiscal consolidation efforts continue.
While the expected reduction is modest, analysts view it as an important turning point after years of rising debt levels driven by weak economic growth, state-owned enterprise bailouts and pandemic-related spending pressures.
S&P also highlighted signs of improvement in South Africa’s medium-term economic outlook.
The agency forecasts economic growth of 1.2 percent in 2026, with average annual growth rising to about 1.7 percent between 2027 and 2029 as reforms aimed at improving infrastructure and business conditions begin to yield results.
Key reforms cited by the ratings agency include efforts to strengthen electricity supply, improve freight and logistics networks, and expand digital infrastructure.
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Among the most notable developments was the recovery of state power utility Eskom, which reported its first profit in eight years during 2025.
S&P noted that Eskom had also achieved a full year without load shedding, marking a significant improvement after years of recurring power cuts that constrained economic activity and investor confidence.
The agency said improvements in electricity supply were expected to support productivity and economic growth across multiple sectors.
However, S&P warned that challenges remain elsewhere in the state-owned enterprise sector.
It pointed to slower progress at freight and logistics operator Transnet, which continues to post losses and remains reliant on government guarantees.
Persistent logistical bottlenecks at ports and rail networks have been identified by businesses as a major obstacle to export growth and industrial expansion.
Despite these challenges, S&P concluded that fiscal improvements and reform momentum currently outweigh risks from a weaker global economy and inflationary pressures, supporting its decision to maintain a positive outlook.
The assessment suggests that continued progress on economic reforms and debt reduction could pave the way for a further ratings upgrade in the coming years, potentially lowering borrowing costs and strengthening investor confidence in Africa’s most industrialised economy.
