> ## Content Index
> Fetch the complete content index at: https://www.businessbagel.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# One of the world’s biggest banks thinks South Africa could escape junk status by 2028
- URL: https://www.businessbagel.com/goldman-sachs-south-africa-investment-grade-2028/
- Published: 2026-09-03T03:15:00.000Z
- Updated: 2026-09-03T03:14:59.000Z
- Description: The bank's case rests on three more years of the fiscal discipline that already earned South Africa its first Fitch upgrade in two decades.
- Author: Christian Maidman
- Tags: Markets, Business Bagel News

Ratings are slow news. South Africa was cut to junk in 2017, and the climb back since has been made in single notches, years apart, without much fuss. Goldman Sachs told clients on 1 September that markets have still not caught up, and put numbers on what catching up would be worth.

A team including the economist Andrew Matheny wrote that its base case is South Africa regaining a first investment-grade rating in 2028, with risks to the timing running both ways. Goldman sees room for the ten-year rand government bond yield to fall by more than a percentage point, to 7.6%. It puts about 9% of upside on the rand against its own fair-value estimate, while noting that collecting it depends partly on what the dollar does.

## The price of insuring against a South African default

Credit default swaps are the other measure the bank looks at, and they are simply what it costs to insure against a government not paying. Five-year cover on South Africa ran at around 116 basis points on 1 September, and Goldman thinks it could ease to about 100\. The bank also argues the bigger structural upside now sits in shares rather than bonds, because the bond rally has already run.

## What has to hold until 2028

None of this is a call on the next quarter. It is a bet that three more years of fiscal behaviour continue. Fitch upgraded South Africa in June to BB, its first upgrade of the country in almost 21 years, and was specific about what it was rewarding: the state has moved from running primary deficits to consistent and widening primary surpluses, meaning it now takes in more than it spends before interest is counted. Government debt is showing signs of stabilising on the back of better revenue collection and tighter spending.

Two other things prop the case up. Treasury says it intends to write the discipline down: director-general Duncan Pieterse said in June that the growing primary surplus would be embedded in a fiscal anchor, with the details due in the Medium Term Budget Policy Statement. Fitch also credited the long average maturity of government debt, over ten years, and the small share of it owed in foreign currency, both of which make the country harder to knock over.

All three big agencies still have South Africa two notches below investment grade. S&P and Moody's carry a positive outlook, which Treasury reads as a sign they could move within 12 to 18 months. Fitch's outlook is stable.