Economy

JOHANNESBURG (Capital Markets in Africa) — S&P Global Ratings cut South Africa deeper into junk territory amid concern the Covid-19 pandemic will send the economy into a sharp downturn. The rating firm downgraded the country’s long-term foreign-currency rating to BB-, three notches below investment-grade, from BB. South Africa’s cost of servicing the public debt will climb to about 6.5% of gross domestic product by 2023, S&P said Wednesday. The South African Treasury said it’s “disappointed”…

JOHANNESBURG (Capital Markets in Africa) — South African Finance Minister Tito Mboweni said the South African economy could contract as much as 6.4% this year due to the coronavirus outbreak and the budget deficit could swell to more than 10% of gross domestic product. In a recording of a conference call with clients of Goldman Sachs Group Inc., Mboweni said he expected the contraction to be deeper than the 5.8% forecast by the International Monetary Fund,…

LAGOS (Capital Markets in Africa) — Moody’s Investors Service (“Moody’s”) has today affirmed Nigeria’s B2 long-term issuer ratings and senior unsecured rating and its (P)B2 senior unsecured MTN programme rating and maintained the negative outlook. The negative outlook continues to reflect the material downside risks to Nigeria’s creditworthiness identified when the outlook on the sovereign’s rating was changed to negative in December 2019. However, those risks have increased since then, exacerbated by the oil price…

ACCRA (Capital Markets in Africa) — Moody’s Investors Service (“Moody’s”) has today affirmed the Government of Ghana’s long-term local and foreign currency issuer and foreign currency senior unsecured bond ratings at B3 and changed the outlook to negative from positive. Moody’s has concurrently affirmed the local and foreign currency senior unsecured MTN ratings at (P)B3 and the rating of the bond enhanced by a partial guarantee from the International Development Association (IDA, Aaa stable) at…

LAGOS (Capital Markets in Africa) – The International Monetary Fund projected Sub-Saharan Africa’s (SSA) real GDP to contract by 1.6% in 2020, down from its  growth forecast of 3.6% last October and following an expansion of 3.1% in 2019. It attributed the anticipated contraction to the adverse impact on production and demand of the measures that governments imposed to contain the spread of the coronavirus, to the spillovers from subdued economic activity worldwide, to tighter…

TUNIS (Capital Markets in Africa) — Moody’s Investors Service (“Moody’s”) has today placed the Government of Tunisia’s B2 issuer ratings on review for downgrade. Moody’s has also placed the Central Bank of Tunisia’s B2 senior unsecured rating and the (P)B2 senior unsecured MTN program and senior unsecured shelf ratings on review for downgrade. The Central Bank of Tunisia is legally responsible for the payments on all of the government’s bonds. These debt instruments are issued…

LAGOS (Capital Markets in Africa) – IHS Markit projected Algeria’s economic activity to contract by 5% in 2020 due to the imposition of restrictive measures to address the coronavirus pandemic, as well as to lower hydrocarbon exports. Also, it forecast the fiscal deficit to widen from 8% of GDP in 2019 to 10% of GDP in 2020, despite the government’s plan to reduce spending by 30% this year. It anticipated that the government is likely…