Ratings agency Fitch yesterday deemed that the weak state of public finances is holding back sub-Saharan Africa’s recovery, stressing that the slow vaccination process keeps risks high.
“The average gross domestic product (GDP) of the countries reviewed by Fitch Ratings fell by 2.6% in 2020, a more moderate decline than in any other region; recovery will bring average growth to 4.3% this year and 5% in 2022, which is relatively modest given the boost from last year’s figure,” the analysts write in a note on sub-Saharan Africa.
In the report, sent to investors and to which Lusa had access, the analysts of this financial rating agency owned by the same owners of the consultancy Fitch Solutions write that “growth is limited by the weak state of public finances in the region, with average public debt rising from 56% of GDP in 2019, to 68% in 2020, and expected to rise to 75% next year.”
For these analysts, economic recovery is also constrained by the effects of the Covid-19 pandemic: “many sub-Saharan African countries will reach ‘group immunity’ only in late 2022, never before, increasing the risk of new and potentially more severe waves of infection, although the impact will be cushioned by the more targeted containment measures.”
On public finances, Fitch Ratings writes that global financial conditions “have been very positive and have mitigated the shock of the pandemic,” but warns that these conditions are likely to be less supportive from now on, “which could lead to greater volatility and thus complicate market access for these countries.”
Since April last year, Fitch Ratings has downgraded the creditworthiness of 12 countries, “partly triggered by the pandemic”, with another five countries having a negative outlook, while it has already upgraded Cameroon and Nigeria from Negative to Stable and foresees positive outlooks for Benin and Ivory Coast.
