Johannesburg – South Africa could secure another sovereign credit-rating upgrade as early as November, with improving public finances and expectations of declining government debt strengthening the country’s prospects of moving closer to investment-grade status.
According to Bloomberg, Finance Minister Enoch Godongwana is expected to outline the government’s fiscal position in the Medium-Term Budget Policy Statement on Wednesday, October 21, as investors look for evidence of sustained fiscal discipline.
Four of 11 economists surveyed by Bloomberg expect a ratings upgrade before the end of 2026, while the remainder anticipate a move in 2027. Moody’s Ratings and S&P Global Ratings are scheduled to review South Africa’s ratings on November 27.
Bank of America economist Tatonga Rusike told Bloomberg that Moody’s was the agency most likely to act, saying: “We view Moody’s as the most likely agency to act, with a potential upgrade to Ba1, while an S&P upgrade to BB+ remains a closer call.”
South Africa’s debt-to-GDP ratio is forecast to fall to 77.5% in the current fiscal year, while economists expect the budget deficit to narrow to 3.8% of GDP, below Treasury’s 4% projection.
Stronger economic performance
In a separate report, Reuters reported that stronger tax collections, particularly from mining profits, could improve the country’s fiscal outlook. Corporate tax receipts increased by 22.8% during the first five months of the fiscal year, while value-added tax collections rose by 9.1%.
BNP Paribas economist Jeffrey Schultz told Reuters that revenue estimates could be revised upwards by more than R50 billion compared with February’s projections.
However, the anticipated improvement faces risks from weak economic growth, rising fuel prices and pressure on government spending. Reuters reported that the International Monetary Fund expects South Africa’s economy to grow by just 1% in 2026.
Schultz cautioned that returning to investment-grade status would require stronger economic performance, saying: “The bar is probably a little bit higher beyond one more immediate upgrade, and that bar really comes from getting growth.”
Fitch Ratings
South Africa has already made progress in rebuilding investor confidence. The government confirmed in a June 2026 statement that Fitch Ratings had upgraded the country’s long-term foreign- and local-currency ratings to BB from BB-, citing fiscal consolidation and prudent financial management.
The government said the upgrade marked Fitch’s first improvement to South Africa’s rating in almost 21 years.
A further upgrade could reduce borrowing costs for the government and businesses, potentially supporting investment. However, South Africa would need sustained improvements in public finances and economic growth to regain investment-grade status.
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Compiled by Betha Madhomu
