Goldman sees more South Africa rating upgrades on strong revenue
South Africa’s revenue outperformance puts the country on course for further credit-ratings upgrades over the next year, Goldman Sachs Group Inc. said.
National Treasury data for June shows corporate tax collections grew about 5.5% to R385-billion on a semi-annualised basis, boosted largely by mining-industry export profits. The figure, released this week, was well above the R345-billion achieved in the 2025-26 fiscal year as well as the R364-billion projected in the February budget for 2026-27.
“From a sovereign credit rating perspective, the continued strength in these fiscal data reinforce our expectation that both Moody’s and S&P will upgrade their credit ratings over the next year,” Andrew Matheny, an economist at Goldman Sachs, said in a note.
Moody’s Ratings currently pegs South Africa at Ba2, which it maintained in May while upgrading its outlook to positive from stable. The company cited an improved fiscal position, the authorities’ commitment to stabilising state finances and progress in implementing economic reforms.
S&P Global Ratings in November raised South Africa’s rating — the country’s first upgrade in two decades — for the same reasons.
A further increase would lift its rating for the country to BB+ from BB and support South African fixed-income instruments “where in our view current pricing does not reflect expectations for a credit rating upgrade,” Matheny said.
South Africa, the continent’s biggest economy, has made significant progress in stabilising its public finances, with improving fiscal metrics reinforcing confidence in the government’s consolidation efforts.
The country recorded a better-than-expected primary budget surplus of 1.1% of gross domestic product in the year through March, surpassing the National Treasury’s February forecast of 0.9%.
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