South Africa credit story - CNBC Africa

cnbcafrica.com · Feb 26, 2026 · Collected from GDELT

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Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the videoThe Loan Market Association (LMA) and International Capital Market Association (ICMA) Annual Africa Summit 2026 culminated in Cape Town, drawing in over 1000 senior stakeholders from across Africa and internationally. Focusing on pivotal discussions around capital market development, regional integration across Africa's loan and bond markets, and sustainable finance, the summit spotlighted South Africa's promising economic trajectory. CNBC Africa's Godfrey Mutizwa engaged in an insightful dialogue with Samira Mensa, Managing Director for Africa at S&P Global Ratings, to explore whether South Africa could expect an upgrade in its credit rating in the near future. South Africa has been on a journey towards economic stability after its local currency rating was upgraded last November, just before the G20 Summit—a testament to the nation's improved fiscal policies. S&P Global Ratings currently holds a positive outlook on South Africa, reflecting the country's efforts in fiscal consolidation and debt stabilization, as emphasized by Mensa. The progress in South Africa’s fiscal and economic policies has been palpable. Government revenues, notably taxes, have exceeded expectations, supporting the government's fiscal consolidation path. This bolsters debt stabilization efforts, keeping debt below 80% of GDP, a significant achievement amidst the backdrop of global economic uncertainties. Current debt levels hover around 77-78% of GDP, still high but stabilized, which is critical for the country's renewed economic status. A key pillar to South Africa’s fiscal strategy is GDP growth. While the numbers remain modest, they are a marked improvement from previous years, with expected GDP growth of 1.5% from 2026 to 2028, up from 0.5% in 2024. Such growth signals a strengthening economy that can sustain further rating improvements. However, global headwinds, such as shifting geopolitical dynamics, could potentially disrupt this trajectory. The narrative is further corroborated by South Africa's removal from the grey list and robust reform momentum supported by the government of national unity (GNU) coalition. These political and economic reforms are instrumental in advancing the country's credit story, aligning the nation with global governance standards in financial markets. When assessing the potential for achieving an investment-grade rating, much hinges on the nation's capital markets, which are the most developed and liquid on the continent. The local currency accounts for a significant portion of South African debt, and any advancement in its ratings will significantly rely on continued fiscal consolidation and a stable GDP growth trajectory. Looking beyond South Africa, Mensa noted that Africa as a whole entered 2026 with a positive momentum, akin to 2025. The continent’s economic and structural reform efforts have seen more upgrades than downgrades, with several sovereign ratings improved, including Morocco's return to investment grade following economic reforms aimed at revitalizing its fiscal framework. Overall, South Africa stands at the edge of economic transformation, with a positive outlook on its ratings suggesting a promising future should policymakers continue on their current path while mitigating global uncertainties. As highlighted by Mensa, “So far, so good,” seems to be the sentiment surrounding South Africa's economic journey.