Nice surprise could be coming for South Africa
South Africa’s revenue outperformance puts the country on course for further credit-ratings upgrades over the next year, Goldman Sachs Group said.
National Treasury data for June shows corporate tax collections grew about 5.5% to R385 billion ($23.3 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 and the 364 billion rand projected in the February 2026-27 budget.
“From a sovereign credit rating perspective, the continued strength in these fiscal data reinforces 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%.
A notable contribution to this shift is South Africa’s finance regulator, which imposed record penalties as it sought to deter misconduct and boost trust in the industry.
The Financial Sector Conduct Authority levied more than R2.89 billion ($175 million) of fines in the year through 31 March compared with 119.8 million rand a year earlier, it said in a report on Friday.
The most serious penalty was in excess of R2 billion levied against online-trading platform Banxso for deepfake advertising and misappropriating client funds.
The authority also withdrew Banxso’s licenses, debarred key company officials for 30 years and forwarded the matter to prosecuting authorities to pursue a criminal case, Divisional Executive of Enforcement Gerhard van Deventer said at a briefing Friday.
The FSCA’s actions have contributed to South Africa’s hard-won exit last year from the global Financial Action Task Force’s dirty-money list in 2025, with the nation demonstrating a revamped regulatory framework and improved compliance.
The regulator concluded 678 investigations during the period, the highest number of cases finalised in a single year. It debarred 68 individuals for failing so-called fit-and-proper standards, withdrew 14 licenses and issued 140 public warnings.
The FSCA imposed a R358.75 million administrative penalty on Stehan Grobler, a former executive at collapsed global retailer Steinhoff International Holdings NV, for the publication of false statements.
“A broader market-abuse probe is still ongoing,” Van Deventer said. “In the coming year, we will eventually get to the point where we can put that case behind us.”
The regulator also imposed a R212 million fine on Medbond Group for investor harm after the company marketed fictitious investment products to investors that resulted in losses of about R194 million.
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