Business Interview: Godongwana says coveted investment-grade status is now ‘within reach’
Markets certainly welcomed this version of the MTBPS. The yield on the benchmark 10-year government bond fell 20 basis points to 8.72% — a big thumbs-up. By revealing contrast, Mexico’s 10-year bond yield is around 9.30% — and Mexico has an investment-grade rating.
Finance Minister Enoch Godongwana expressed optimism that South Africa could regain its coveted investment-grade credit rating by 2028. Speaking to Daily Maverick, Godongwana highlighted the positive impact of the Medium Term Budget Policy Statement (MTBPS) released last year, which showcased a dynamic duo of rising tax revenues and falling debt.
This turnaround from the country's previous junk status a decade ago was attributed to disciplined cost management and the achievement of set outcomes. The three major credit ratings agencies - S&P Global, Fitch, and Moody's - currently rate South Africa two notches below investment-grade status. However, they have indicated confidence in the country's ability to repay its debt, resulting in lower borrowing costs and a boost for government services.
Although Godongwana speculated on his own tenure in the position, he acknowledged that the credit rating upgrade is a reflection of the Treasury team's competence and his leadership.
Written by urgent.news from Daily Maverick's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
