South Africa’s finances are turning the corner

Fitch Ratings raised South Africa’s credit rating, citing the nation’s progress in improving its finances.

The credit assessor upgraded the country’s rating by one level to BB, two notches below investment grade, according to a statement on Friday. The outlook is stable.

The move reflects “South Africa’s record of prudent fiscal management and progress on fiscal consolidation, despite weak economic growth and domestic and external shocks,” wrote analysts Thomas Garreau, Paul Gamble and Jan Friederich.

“Together with GDP revisions, this leaves debt/GDP well below levels anticipated when we downgraded it to ‘BB-’ in 2020.”

The upgrade rewards Africa’s largest economy’s commitment to fiscal consolidation as the country grapples with inflationary pressures from the Iran war, sluggish growth and a heavy debt burden.

The National Treasury expects South Africa’s debt-to-gross domestic product ratio to have stabilised in the year ended March 2026 after rising for nearly two decades, while posting a third consecutive primary budget surplus, where revenue exceeds non-interest expenditure.

The nation has also made progress in implementing energy and logistics reforms needed to revive economic growth.

The upgrade follows a similar move by S&P Global Ratings, which lifted the nation’s credit rating in November by one level to BB — two steps below investment grade — and retained a positive outlook.