South Africa at an important turning point
Political and economic expert Dr Frans Cronje says South Africa is at an important turning point and that there are many positive signs in the economy.
Cronje shared his views about South Africa’s economic policies during a discussion with Mike Sham on the State of the Nation podcast.
He described Finance Minister Enoch Godongwana’s 2025 Medium-Term Budget Policy Statement as very positive.
He said that the budget policy statement indicates that South Africa’s fiscal position is well under control.
However, Cronje noted that the budget deficit is significantly higher than economic growth and that debt levels are much too high.
Despite this, there are positive developments. South Africa has run a primary budget surplus (before interest payments) for many years.
“This means if you can sort out the debt, the country has more than enough money to run its operations,” he said.
“Another positive is that the minister could credibly say that the debt curve in South Africa has peaked.”
Godongwana said in his mid-term budget that South Africa’s debt-to-gross domestic product ratio will stabilise at 77.9% in the current fiscal year.
“This is the first time since the 2008 financial crisis that public debt will not grow as a percentage of GDP,” he said.
He explained that spending has consistently exceeded revenue since 2008. This drove up debt and debt-service costs.
The debt servicing costs are now so high that the government has had to cut spending on essential services, such as education and security.
However, the good news is that South Africa is turning the situation around, which will put the country on a much better trajectory.
Another positive sign, Cronje said, was that Godongwana’s speech also contained a strong political statement.
“It was the strongest political statement to date about the long-term sustainability of the government of national unity (GNU),” he said.
S&P Global upgrades South Africa’s credit rating
Cronje’s view that South Africa is at an important turning point was confirmed by S&P Global’s decision to upgrade its credit rating for the first time in 20 years.
On Friday, 14 November 2025, S&P Global raised South Africa’s foreign currency rating to BB and its local currency rating to BB+, with a positive outlook.
The ratings agency said it expects South Africa’s real GDP (gross domestic product) growth to rise to 1.1% in 2025.
It further expects the country’s economic growth to average 1.5% between 2026 and 2028, as reforms to the electricity sector and other key areas support growth.
In the first half of the financial year ending March 31, 2026, South Africa’s fiscal revenue outperformed budgeted targets.
“We expect the government to post its third successive year of primary surpluses,” S&P Global said in a statement.
“Given improving tax collections and expenditure constraints, we expect fiscal consolidation to continue through to fiscal 2028.”
It added that contingent liabilities will ease as state-owned enterprises (SOEs) are likely to require less financial support in the future.
Given these factors, it upgraded South Africa’s foreign and local currency long-term sovereign credit ratings with a positive outlook.
The positive outlook reflects the potential for further improvements in fiscal metrics and stabilisation of government debt.
This positive outlook is contingent on South Africa’s coalition government continuing its fiscal consolidation.
“The outlook also reflects the possibility of stronger growth than we currently expect, despite trade- and tariff-related headwinds,” it said.
It said this growth relies on the authorities accelerating economic reforms while addressing infrastructure pressures.
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