South Africa earns first Fitch ratings upgrade in more than two decades.
Image: Jolame Chirwa via Unsplash
South Africa has secured a significant boost to its international credit standing after Fitch Ratings upgraded the country's long-term foreign and local currency credit ratings from BB- to BB.
The move, announced on Friday, marks the first time in nearly 21 years that Fitch has raised South Africa's sovereign credit rating and reflects growing confidence in the country's fiscal position.
Fitch said the upgrade was driven by prudent management of public finances and steady progress in strengthening the country's fiscal outlook, despite sluggish economic growth and a range of domestic and global economic challenges.
The agency noted that South Africa's debt-to-GDP ratio has tracked well below the levels it had anticipated when it downgraded the country to BB- in 2020.
Other factors supporting the upgrade included sustained primary budget surpluses, stronger revenue collection, disciplined expenditure controls and ongoing reforms aimed at improving the performance of the energy and logistics sectors.
According to Fitch, South Africa has successfully shifted from primary fiscal deficits to consistent and widening primary surpluses in recent years. The agency also highlighted the country's debt structure as a positive, pointing to the long maturity profile of government debt and the relatively small share of borrowing denominated in foreign currency.
The decision places South Africa among a limited number of countries worldwide to receive a Fitch upgrade during 2026.
The latest ratings action follows encouraging assessments from other major agencies. S&P Global Ratings upgraded South Africa's sovereign rating by one notch in November 2025, while Moody's Ratings recently assigned the country a positive outlook.
All three major ratings agencies now place South Africa two notches below investment grade, although the positive outlooks maintained by Moody's and S&P indicate that further upgrades remain possible over the next 12 to 18 months.
Government welcomed the decision, describing it as evidence of growing confidence in South Africa's fiscal path and reform programme.
The National Treasury said South Africa had become only the second G20 country to receive a ratings upgrade from Fitch this year, despite a challenging global backdrop in which several investment-grade sovereigns have faced negative ratings actions.
Treasury director-general Duncan Pieterse said the improved rating would deliver tangible benefits across 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 added that while South Africa has not yet returned to investment-grade territory, the latest decision signals 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 assessment highlighted fiscal discipline as one of South Africa's key strengths.
The agency pointed out that the country has achieved average primary budget surpluses of about 1% of GDP over the past four years, marking a substantial turnaround from the primary deficits that characterised much of the previous decade.
It also projected that South Africa's debt burden would stabilise at roughly 80% of GDP over the next two years, supported by stronger fiscal performance and continued primary surpluses.
Pieterse said government remains committed to maintaining sound public finances while advancing structural reforms aimed at lifting economic growth, improving investor confidence and strengthening the country's long-term prospects.
He said fiscal policy would continue to prioritise stabilising and ultimately 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.”
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