The agency also cited sustained primary budget surpluses, improved revenue collection, disciplined spending management and ongoing reforms in the energy and logistics sectors as key factors behind the upgrade.
Image: File
South Africa has received a major vote of confidence from global credit ratings agency Fitch Ratings, which upgraded the country's long-term foreign and local currency credit ratings to BB from BB-, marking the first upgrade by the agency in almost 21 years.
The upgrade, announced on Friday, reflects what Fitch described as South Africa's prudent fiscal management and progress in consolidating public finances despite weak economic growth and a series of domestic and international economic shocks.
According to Fitch, South Africa's debt-to-GDP ratio is now significantly lower than levels anticipated when the agency downgraded the country to BB- in 2020.
The agency also cited sustained primary budget surpluses, improved revenue collection, disciplined spending management and ongoing reforms in the energy and logistics sectors as key factors behind the upgrade.
The ratings agency noted that South Africa has moved from running primary fiscal deficits to achieving consistent and widening primary surpluses. It also highlighted the country's favourable debt profile, including the long average maturity of government debt and the relatively low proportion of foreign currency-denominated borrowing.
The latest decision places South Africa among a small group of countries to secure an upgrade from Fitch this year.
The upgrade follows positive ratings developments from other major agencies. In November 2025, S&P Global Ratings upgraded South Africa's sovereign rating by one notch, while Moody's Ratings recently assigned the country a positive outlook.
All three major ratings agencies now assess South Africa at two notches below investment grade, with Moody's and S&P maintaining positive outlooks that suggest further upgrades could be possible over the next 12 to 18 months.
The government welcomed the decision, saying it signals growing confidence in the country's fiscal trajectory and reform agenda.
The National Treasury said South Africa had become only the second G20 nation to receive an upgrade from the agency in 2026, despite a difficult global environment in which several investment-grade sovereigns have faced negative ratings actions.
Treasury director-general Duncan Pieterse said the improved ratings would have tangible benefits for the economy.
“Improved sovereign credit ratings help to lower borrowing costs for government, businesses and households and have tangible benefits for ordinary people,” Pieterse said.
He noted that while South Africa had not yet regained investment-grade status, the country was making meaningful progress after more than a decade of ratings downgrades.
“South Africa still has some way to go to regain its investment grade credit rating but for the first time in more than a decade we are seeing a clear turnaround in the downward ratings trend,” he said.
“The turnaround is especially notable because it comes at a time when the global sovereign credit trend is overwhelmingly negative.”
Fitch's own assessment pointed to South Africa's fiscal discipline as a major strength.
The agency noted that the country has recorded average primary budget surpluses of around 1% of GDP over the past four years, a significant improvement from the primary deficits that characterised much of the previous decade.
The ratings agency also forecast that South Africa's debt burden would stabilise at around 80% of GDP over the next two years, supported by improved fiscal performance and continued budget surpluses.
Pieterse said the government remains committed to maintaining sound public finances and advancing structural reforms aimed at boosting economic growth, improving investor confidence and strengthening the country's long-term economic prospects.
He said fiscal policy would continue to focus on stabilising and eventually reducing the debt-to-GDP ratio through sustained primary budget surpluses.
“Fiscal policy continues to focus on achieving its twin objectives of stabilising and then reducing the debt to GDP ratio, by running a growing primary budget surplus – where revenue exceeds non-expenditure by an ever-wider margin,” Pieterse said.
“This will put government’s debt level on a more sustainable path. We will embed this principle in a fiscal anchor, details of which we expect to announce in the 2026 Medium Term Budget Policy Statement.”
BUSINESS REPORT