Cote d'Ivoire is the only sub-Saharan African country to maintain a "positive outlook" in the portfolio of sovereigns rated by Fitch Ratings in the region.
In a note published on December 8th, the rating agency noted that in a context marked by the Covid-19 crisis, the states of the area are facing the debt challenge that puts pressure on their public finances while the need for liquidity will be decisive to revive the economic machine.
Of the 19 sub-Saharan states that the agency assesses, 7 have "negative prospects", of which 5 are rated in the CCC category, or even below (including Zambia, Gabon and Congo Brazzaville), the last levels before default (D). The rest have a "stable outlook" and only Cote d'Ivoire, rated B+, has been able to maintain a "positive outlook", reflecting the fact that the country's ability to pay its creditors on time is likely to improve, including its rating.
This view reinforces the reputation of the WAEMU's leading economy, which managed to raise €1 billion eurobonds over 12 years at a rate of 5% at the end of November, the lowest rate it has ever obtained on the debt market.
Debt as the Engine of Recovery
Fitch indicates that several countries in its portfolio, namely Benin, Cote d'Ivoire, Ethiopia, Ghana, Kenya, Uganda and Rwanda, which should be able to achieve the feat of maintaining positive growth this year, will be able to regain their pre-pandemic performance, a growth whose engine is debt financing investments, which raises questions about its sustainability.
For other countries, "fiscal consolidation and restricted access to foreign currencies will affect the pace of recovery", the agency stresses.
More generally, the debt of these 19 states, which has been on an upward trend since 2012, is expected to continue to grow, and in 7 countries of this portfolio, debt service should still represent at least 20% of their tax revenues.
Sub-Saharan countries rated by Fitch Ratings
Assessment scale of the main international credit rating agencies
Publié le 11/12/20 13:41
Jean Mermoz Konandi
SN
CEMAC
