Nearly Two Decades Later, South Africa May Finally See a Ratings Upgrade
It’s been almost two decades since one of the global credit rating agencies upgraded South Africa’s sovereign debt rating. Since then there have been several downgrades and by 2020 all major agencies had downgraded South Africa into non-investment grade, otherwise known as ‘junk.’
In the coming months, agencies like S&P Global Ratings, Moody’s, and Fitch Ratings will review South Africa’s progress. Analysts say the country has shown signs of recovery; debt levels are stabilising, spending is being managed more carefully, and government revenue has improved.
A ratings upgrade would mark a major milestone. It would mean lower borrowing costs for government, higher confidence from investors, and renewed interest in South African bonds. For ordinary people, that could translate into stronger business confidence, more jobs, and better investment opportunities.
But challenges remain. Economic growth is still too low to match population growth, and unemployment is stubbornly high. While power supply has improved, businesses still face issues like slow infrastructure repairs, water shortages, and red tape for importing skills and equipment.
Finance Minister Enoch Godongwana has emphasised that South Africa’s fiscal path is now more sustainable than before. The government’s recent 3% inflation target and steps to curb debt have also impressed investors, giving the country a chance to shift the narrative.
Hosting the G20 Summit in 2025 offers another opportunity to showcase South Africa as a stable, reform-focused economy. If handled well, this could strengthen the case for an upgrade.
The last time South Africa received an upgrade was in the early 2000s; a period of strong growth and fiscal discipline. Returning to that level won’t happen overnight, but for the first time in years, there’s reason to believe it’s possible.
South Africa is deep in ‘junk’ status and, even if S&P Global announces an upgrade this weekend, it’s still a journey back to investment grade. But confidence is slowly returning that South Africa can manage its money and can look forward to a better future.