S&P upgrade ends 16-Year wait as Eskom, fiscal reforms pay off
Key topics:
First rating upgrade in 16 years by a major agency
Eskom’s profit eases government debt risk
Fiscal surplus, tax gains bolster confidence and growth
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.
If you prefer WhatsApp for updates, sign up to the BizNews channel here.
BizNews Reporter
S&P Global Ratings announced on Friday, November 15, 2025, that it had upgraded South Africa’s sovereign credit rating for the first time in two decades, citing a stronger economic outlook and improved fiscal stability. This move represents the first credit rating upgrade South Africa has received from any major credit rating agency in more than 16 years.
The credit assessor upgraded the country’s long-term foreign currency rating to ‘BB’ from ‘BB-‘. Additionally, S&P lifted the long-term local currency sovereign credit rating to ‘BB+’ from ‘BB’. Despite the positive revision, the country’s rating remains classified as below investment grade, or "junk" status, with the ‘BB’ foreign currency rating sitting two notches below investment grade and the ‘BB+’ local currency rating sitting one notch below. S&P maintained a positive outlook for the nation, suggesting potential for further enhancement in fiscal metrics.
The decision to upgrade was driven by several positive developments within the country. S&P cited stronger growth prospects and an improving fiscal trajectory as key factors. Crucially, the ratings company noted a reduction in contingent liabilities due to performance improvements and reforms at the state-owned electricity utility, Eskom. Eskom’s improved financial status, having posted its first profit in eight years, reduces the likelihood that the government will need to provide further support.
The credit action underscores South Africa’s commitment to fiscal consolidation efforts. The government is projected to achieve its third consecutive annual primary surplus, where revenue exceeds expenditure excluding debt interest payments, in the 2025/26 fiscal year. This consolidation is supported by general government revenues that are forecast to exceed budgeted numbers, largely due to strong receipts from value-added tax and corporate income tax.
Following the upgrade, the National Treasury issued a statement welcoming the development. The Treasury highlighted that South Africa is one of only three nations globally to receive an S&P upgrade in 2025 while simultaneously maintaining a positive outlook. The government indicated that the current fiscal policy supports macroeconomic stability by stabilising debt and narrowing the budget deficit over the medium-term expenditure framework.
Investor confidence has notably strengthened recently, partially fueling a rally in South African assets. The government believes that these fiscal improvements, reinforced by the ratings upgrade, will lead to reduced borrowing costs, stronger growth, improved confidence, and accelerated job creation in the medium term. For long-term growth acceleration, the National Treasury emphasised the need to continue strengthening macroeconomic stability, accelerate structural reforms, and improve public-sector infrastructure investment. The S&P rating now aligns with the Ba2 credit rating assigned by Moody’s, which is scheduled to review South Africa’s rating in December 2025.