S&P Global upgraded South Africa’s long-term foreign currency credit rating to “BB” from “BB-” on Friday. The rating agency cited stronger growth prospects, an improving fiscal outlook, and reduced contingent liabilities as key factors.
Improvements at the state-owned electricity utility, Eskom, played a pivotal role in lowering financial risks for the government. With the upgrade, South Africa now sits two notches below investment grade, reflecting cautious optimism in its economic trajectory.
Analysts welcomed the move as a sign of renewed confidence in fiscal discipline and policy reforms within the country. Investors may view the upgrade as an encouraging signal, potentially improving access to international financing and borrowing terms.
Despite progress, challenges remain, including energy supply reliability and structural reforms necessary for long-term economic stability. S&P’s decision underscores the interconnectedness of public utilities’ performance and national creditworthiness in emerging markets.
The announcement follows ongoing efforts by South African authorities to stabilise finances and attract foreign investment amid global uncertainty. Market watchers will monitor whether the upgrade triggers increased capital inflows and strengthens confidence in South Africa’s growth outlook.
