Cape town: Government has welcomed Fitch’s decision to affirm South Africa’s long-term foreign and local currency debt ratings at ‘BB-‘ and maintain the stable outlook.

According to South African Government News Agency, South Africa’s credit rating is constrained by several factors, including low real gross domestic product (GDP) growth, high poverty and inequality levels, a high and rising government debt-to-GDP ratio, and a rigid fiscal structure that hampers budget deficit reduction.

The National Treasury noted that despite these challenges, the ratings are supported by a favourable government debt structure with long maturities and mostly local-currency-denominated, strong institutions, and a credible monetary policy framework.

Fitch also acknowledged that the Government of National Unity (GNU) is continuing its reform agenda under Operation Vulindlela Phase 2. This initiative, a collaboration between the Presidency and National Treasury, aims to accelerate structural reforms to foster economic growth
and job creation.

Phase II of Operation Vulindlela will implement reforms in three new areas, including digital transformation. According to the Treasury, reforms focused on improving network infrastructures, such as electricity, logistics, water, and digitalisation, have alleviated load shedding and halted the decline in freight volume transported, contributing to Fitch’s forecast of a modest increase in real GDP growth.

The Treasury further stated that the government’s economic growth strategy will focus on maintaining macroeconomic stability to reduce living costs and grow investment, executing reforms to promote a more dynamic economy, building state capability in core functions, and supporting growth-enhancing public infrastructure investment.

Over the medium term, the Treasury announced that the government will invest over R1 trillion in infrastructure. Reforms will facilitate investment by both the state and the private sector in roads, rail, energy, and water.

Additionally, major reforms to state
spending and the budget process are underway, including the implementation of targeted and responsible savings across government. The Treasury announced that further details will be provided in the Medium-Term Budget Policy Statement on 12 November 2025.