{"id":142278,"date":"2025-11-16T03:59:12","date_gmt":"2025-11-16T03:59:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/142278\/"},"modified":"2025-11-16T03:59:12","modified_gmt":"2025-11-16T03:59:12","slug":"south-africas-credit-rating-upgraded-for-first-time-in-two-decades","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/142278\/","title":{"rendered":"South Africa\u2019s credit rating upgraded for first time in two decades"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

South Africa has secured its first credit upgrade in two decades after S&P Global Ratings lifted the country\u2019s sovereign ratings by one notch to BB on the back of reforms and growing fiscal revenue.\u00a0<\/p>\n

The agency upgraded its foreign currency sovereign credit rating for Africa\u2019s most industrialised nation to BB from BB- on Friday, two notches below investment grade. The local currency rating also increased a notch to BB+. <\/p>\n

S&P said it had a positive outlook given the \u201cpotential for further improvements in fiscal metrics and government debt stabilisation\u201d after a medium-term budget update this week signalled that government debt was coming under control.<\/p>\n

The improvement underlines a turnaround under President Cyril Ramaphosa\u2019s government from constant rolling power blackouts and crisis in his African National Congress just a few years ago to structural reforms and the advent of coalition government.<\/p>\n

It will also raise hopes of upgrades by other rating agencies and the eventual restoration of South Africa\u2019s investment-grade status half a decade after it was junked.<\/p>\n

S&P junked South Africa\u2019s rating in 2017 in the depths of misrule under Jacob Zuma, which cast a long shadow over the economy. South Africa lost its last investment-grade rating, from Moody\u2019s, in 2020.<\/p>\n

\u201cThe outlook also reflects the possibility of stronger growth than we currently expect, despite trade and tariff-related headwinds,\u201d S&P said.<\/p>\n

The rolling blackouts that hamstrung the economy have largely been avoided this year and Eskom, the state power company, returned to profit after eight years of losses and reliance on government bailouts.<\/p>\n

\u201cWe\u2019ve been in decline for the last 10 years, so this possibly signifies a turning point,\u201d said Asief Mohamed, chief investment officer of Cape Town-based Aeon Investment Management. <\/p>\n

But high levels of crime as well as corruption in both the private and government sectors remain a concern, he added. <\/p>\n

S&P said the upgrade reflected South Africa\u2019s recent record of budget surpluses, excluding interest payments, and less financial pressure from Eskom.<\/p>\n

However, South Africa\u2019s government debt is set to fall only gradually to 75 per cent as a share of GDP by 2028, and debt interest will average nearly a fifth of revenues in the next three years, S&P added.<\/p>\n

After a decade in which GDP expansion remained below 1 per cent, there have been other positive developments.<\/p>\n

The country was recently removed from the Financial Action Task Force\u2019s grey list while the survival of the government of national unity has improved investor confidence.<\/p>\n

Recommended<\/p>\n

\"A<\/a><\/p>\n

This week, the government cut its inflation target for the first time this century to 3 per cent<\/a>, bolstering a rand rally.<\/p>\n

Speaking during his half-year budget update on Wednesday, finance minister Enoch Godongwana said the lower target would support \u201chousehold spending and business investment, boosting economic growth and job creation\u201d.<\/p>\n

S&P said it expected South Africa\u2019s GDP growth to pick up to 1.1 per cent this year, from 0.5 per cent in 2024.<\/p>\n

South African assets have stood out this year even in the midst of a rally in other emerging markets, while the rand is up about a tenth against the dollar in spot terms. The Johannesburg all-share index has risen about a third this year, or nearly 50 per cent in dollar terms.<\/p>\n

The yield on South Africa\u2019s 10-year rand government debt has fallen from 11 per cent in April to about 8.7 per cent.<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":142279,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-142278","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/142278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=142278"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/142278\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/142279"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=142278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=142278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=142278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}