By Ntando Thukwana and S’thembile Cele.
South African Finance Minister Enoch Godongwana said the nation’s recent credit-rating upgrade was welcome and that talks on a trade deal with the US were ongoing.
“We are in serious discussions” with the US, Godongwana told the inaugural Bloomberg Africa Business Summit in Johannesburg on Tuesday. “At the beginning, the negotiations were not that constructive,” now they are, he said, adding that Pretoria was revising its submission to Washington.
South Africa hopes to negotiate lower tariffs after President Donald Trump slapped 30% levies on the country’s exports to the US, potentially threatening thousands of jobs in its automobile and citrus-farming industries. A number of other countries who received similar action have since negotiated better deals and the US has made some exemptions for certain agricultural products including oranges, of which South Africa is a major exporter.
Trade tensions buffeted South African assets earlier in 2025. But investors have warmed to the country’s assets in recent months, amid optimism that its public finances were being brought under control after years of mismanagement.
That progress was rewarded when S&P Global Ratings lifted South Africa’s credit rating last week for the first time since 2005 — propelling it to BB — two levels below investment grade. The agency also maintained its positive outlook on the debt, indicating more good news may be in store.
Still, Godongwana played down the importance of the upgrade in the context of the broader goal of accelerating South Africa’s economic growth and job creation.
“I need to do what is good for the country” and if that translates into an upgrade that’s good, the minister said. “My preoccupation is to how do I make sure that all of these things which are costly to this economy are removed.”
The minister has previously criticised ratings agencies for being slow to acknowledge South Africa’s improved debt trajectory and accused them of being biased against African nations.
The upgrade came two days after Godongwana delivered a budget update that showed revenue collection beating previous projections and reiterated the government’s commitment to fiscal consolidation. Debt is expected to peak at 77.9% of gross domestic product in the current fiscal year, a marginally higher level than forecasted in May, before declining.
The minister’s 2025 budget was delayed earlier in the year by a fight within the country’s governing coalition over a plan to increase consumer taxes, which was ultimately abandoned.
Godongwana declined to rule out raising taxes in the future, but said that was not currently top of mind.
“What we need to be focusing on is efficiency of spending. That’s my preoccupation at the moment,” he said. “Not focusing on increasing taxes. I’m not ruling them out, but not right now,” the minister added.
© 2025 Bloomberg.