What South Africa's first S&P ratings upgrade in nearly 20 years means to the consumer

Stephen Grootes speaks to Sanisha Packirisamy, Momentum Investments’ Chief Economist, and Kevin Lings, Chief economist at StanLib asset management about S&P Global Ratings upgrading South Africa for the first time in nearly two decades.

Listen to the interview in the audio player below.

Two of South Africa’s sovereign credit ratings have been upgraded by S&P Global Ratings, in line with market expectations following last week's week’s 2025 Medium Term Budget Policy Statement, which highlighted the country’s improved fiscal position.

The ratings agency raised South Africa’s foreign currency long-term sovereign rating to BB from BB-, and its local currency long-term rating to BB+ from BB.

According to S&P, a BB+ rating is one notch below investment grade, while a BB rating is two notches below investment grade.

South Africa is one of just three countries globally to secure an S&P upgrade in 2025.

The South African government welcomed the upgrades in a statement issued by National Treasury department.

Speaking to Stephen Grootes on The Money Show, Momentum Investments’ chief economist, Sanisha Packirisamy says in the long run, this ratings upgrade benefits investors, households, and businesses.

"In the medium term budget policy statement, it was very encouraging that government decided to use that revenue overrun in a more prudent way, and we've seen in the past that it's not often where we use a revenue overrun in a prudent way," says Packirisamy.

"The structural reform momentum continues to gain progress, we've seen a fair amount of it come through in the energy sector, but we do need to see this get pulled through into the logistics sector which continues to be a drag on growth," adds Packirisamy.

Kevin Lings, chief economist at Standlib asset management says while the rating has improved, South Africa remains well below investment grade.

"...but the direction of travel is important, and to get the actual acknowledgment of an upgrade I think is good, and I would argue probably more important than that it kept us on a positive outlook. In other words what they're saying is if we continue on the current path, then we would expect another upgrade, let's say in the next 12-18 months,"says Lings.

Lings says the key focus no should be to continue doing exactly what got South Africa into this positive position.

"Essentially that is fiscal discipline. Fiscal consolidation. National Treasury made it clear some time ago that that was the intention, and they made very measurable progress. Obviously the debt level remains high and the interest cost of that debt remains high, but underneath it there are meaningful improvements," adds Lings.

Scroll to the top of the article to listen to the full interview.