Sub-Saharan Africa Sovereign Rating Trends 2017

By: S&P Global Ratings

S&P Global Ratings currently rates 17 sovereigns in sub-Saharan Africa (SSA), up from 12 in 2008 and two in 2000, making Africa the fastest growing region for sovereign ratings over the last decade and a half.

Highlights of the report include:

We expect economic conditions for SSA economies to remain challenging in 2017, partially because of the region’s high commodity dependence and relatively slow growth in key exports markets, including China and Europe.

In 2016, the region’s ratings trajectory was firmly downward. In the past six months, we downgraded four sovereigns (Mozambique, the Republic of Congo [Congo-Brazzaville], Nigeria, and Rwanda). Mozambique and Congo-Brazzaville faced repayment issues in 2016. We downgraded Mozambique to ‘SD’ (selective default) in April, before raising the rating to ‘B-‘.

In November, we once again lowered the rating, to ‘CC’, due to the government once again announcing plans to restructure the majority of its commercial debt obligations, includingthe bond it issued in April 2016. Congo-Brazzaville also underwent a default in August as they missed the payment deadline on their bond by a few days.

We have revised one outlook to negative from stable, on Angola, and four to stable from negative on Cape Verde, Kenya, Nigeria, and Rwanda. SSA Eurobond issuance was relatively quiet in the second half of 2016, owing partially to the demand by the market for higher yields. Sovereigns with sizable local debt markets have instead increased local issuance.

Nevertheless, for 2017, Nigeria already announced its intention to issue on both the international and domestic markets, and we may see Eurobond issuances from some others, including Ghana.

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