Government notes S&P’s decision to affirm South Africa’s long term foreign and local
currency debt ratings at ‘BB-’ and ‘BB’, respectively. The agency maintains the positive
outlook.

According to S&P, government’s economic and fiscal reforms could improve the country’s
medium-term growth and debt trajectory. The agency also sees the low external debt
position, flexible currency, and deep domestic capital markets as fundamental credit
strengths that should cushion against external rising financing risks.

S&P also notes that higher-than-expected tax revenue, relative to the agency’s expectations
six months ago, will help to reduce the fiscal deficit as a proportion of GDP.

Government’s medium-term fiscal strategy prioritises achieving fiscal sustainability by
narrowing the budget deficit and stabilising debt; increasing spending on policy priorities
such as security and infrastructure, thereby promoting economic growth; and reducing fiscal
and economic risks, including through targeted support to key public entities and building
fiscal buffers for future shocks.

Issued by National Treasury
Date: 18 November 2022

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