Good news about South Africa’s finances

Fitch Ratings has upgraded South Africa’s Long-Term Issuer Default Ratings (IDRs) to ‘BB’ from ‘BB-‘, with a stable outlook.

This rating is an important measure for global investors, as it indicates a country’s likelihood of paying its debts on time.

A higher rating results in South Africa paying lower interest rates, which, in turn, assists the country’s long-term financial outlook.

On Friday, 5 June 2026, Fitch Ratings has upgraded South Africa’s credit rating due to its improved finances.

The company explained that the upgrade primarily reflects South Africa’s record of prudent fiscal management and progress on fiscal consolidation.

South Africa has achieved an average fiscal primary surplus of 1% of GDP over the last four years.

This represents a shift compared with the average 0.6% of GDP fiscal primary deficit from the fiscal year ending in March 2012 (FY11) to FY19.

It highlights South Africa’s recent record of fiscal prudence happened despite the country’s weak economic growth and domestic and external shocks.

“South Africa’s ‘BB’ IDR is constrained by low real GDP growth, high poverty and inequality, a high debt/GDP ratio, and a high interest/revenue ratio,” it said.

“The ratings are supported by a favourable government debt structure with long maturities and mostly denominated in local currency.”

It added that South Africa’s strong institutions, such as the South African Reserve Bank, and a credible monetary policy framework, are further positive factors.

Another positive was that supply-side constraints on economic activity have eased with the implementation of structural reforms.

This, Fitch Ratings said, should enable South Africa’s growth to moderately increase in the next few years.

There is also bad news, like increased political risk. The company believes President Cyril Ramaphosa will remain in office despite impeachment proceedings.

However, tensions within the ANC and the government of national unity (GNU) are likely to increase, with the November 2026 municipal elections being a pressure point.

Another negative point is that the war in the Middle East will lift inflation, but fiscal effects are contained so far.