Treasury says upgrades show path to investment grade

South Africa’s recent credit-rating upgrades are a strong endorsement of government policy and show the nation can restore its coveted investment-grade status if it stays on track, said the National Treasury chief.

“This is a clear change of direction in our ratings trajectory after more than a decade of negative ratings news,” Duncan Pieterse wrote in an op-ed published on News24 Thursday. “It could ultimately see South Africa regain its investment grade status — if it continues to do the right things on fiscal and economic policy.”

Fitch Ratings raised its credit assessment of South Africa on June 5 to BB, two notches below investment grade, delivering the upgrade before putting the rating on a positive outlook as it often does before taking such a step.

The move brought it in line with Moody’s Ratings and S&P Global Ratings, which also have the nation on a positive outlook — a significant marker of confidence against the backdrop of dimming global growth prospects and heightened inflation risks due to the Iran war.

“South Africa is only the second Group of 20 country to be upgraded by Fitch this year,” Pieterse said. “It is one of only two G20 countries on positive outlook at S&P and the only one at Moody’s.”

After years of weak economic growth, rising debt and deepening concern over crime, mismanagement and corruption — which saw South Africa’s credit rating downgraded to junk by all three agencies between 2017 and 2020 — investors have taken note.

While the rand has weakened slightly since the Middle East conflict began in late February, it remains about 9% stronger against the dollar versus a year ago. The yield on the benchmark 10-year South African government bond are roughly 148 basis points lower.

In addition to improving public finances, South African assets have also benefited from the country’s removal from a dirty-money watch list and the adoption of a 3% inflation target by the central bank last year, whose announcement delivered a sharp drop in government bond yields.

Pieterse said that being two notches below investment grade means there is still a way to go, “but the momentum is now positive” and the government is committed to lifting economic growth and continuing to lower public debt.

South Africa’s coalition government, formed after the African National Congress lost its parliamentary majority in 2024 elections for the first time since 1994, has made economic growth a core goal under the leadership of President Cyril Ramaphosa.

Still, the future of the nation’s reform agenda, which has numerous critics in a country still blighted by inequality 30 years after the end of White-minority rule, will face questions in coming years.

South Africa next holds national elections in 2029. But a municipal ballot in November could deliver further voter setbacks for the ANC that weakens Ramaphosa’s position at the head of the party — a post which he must relinquish anyway at the end of next year.

The development could weaken his influence over the succession process, raising questions about the durability of his reforms and even his ability to remain as president of the nation.

The ANC has forced its last two leaders to step aside as the head of state after relinquishing the party leadership position.

© 2026 Bloomberg