Increasing External Risks and Weak Public Finances Keep 2020 Outlook on SSA Sovereigns Negative


Tuesday, January 21, 2020 / 02:40 PM / By Moody's Investors Service / Header Image Credit:


  • Weak government finances will continue to pose a constraint
  • Less predictable external environment will aggravate existing challenges and make sovereigns more vulnerable to event risk


The negative 2020 outlook for sovereign creditworthiness in Sub-Saharan Africa reflects the worsening external environment, weak government finances and subdued GDP growth, Moody's Investors Service said in a report today.


Sovereigns have made limited progress in reducing risks linked to elevated debt burdens and debt servicing needs, while growth won't be strong enough to meaningfully buttress incomes or increase economic resilience.


"The less predictable external environment is aggravating Sub-Saharan African sovereigns' existing challenges and makes them more vulnerable to event risk," said David Rogovic, a Moody's Vice President - Senior Analyst and the report's co-author. "Most governments' limited capacity to respond to even modest negative external shocks exacerbates the region's sensitivity to the more negative global environment."


Moody's expects modest fiscal consolidation for the region, with the median fiscal deficit improving to 3% of GDP in 2020 compared with 3.3% in 2019, while the debt burden will decline to 51% of GDP compared with 54.5% of GDP in 2019, but still considerably higher than 40% of GDP five years ago.


Economic growth is forecast to accelerate modestly, with regional real GDP (weighted average) growth rising to 3.5% in 2020 from 3.1% in 2019, weighed down by sluggish growth in the region's largest economies, Nigeria and South Africa. Growth remains below what is needed to raise incomes significantly or to increase economic resilience, while risks are tilted to the downside given the less predictable external environment.

Proshare Nigeria Pvt. Ltd.


Related News

  1. A Little Better Message in the New WEO; 2020 Global Forecast Trimmed from 3.4% to 3.3%
  2. Tentative Stabilization, Sluggish Recovery?
  3. NSR H1 2020 (10) - Monetary Policy - CBN Caressing Both FPIs and Economic Growth
  4. NOVA Economic Outlook H1 2020 - Nigerian Economy To Grow By 2.4% YoY Over 2020
  5. NSR H1 2020 (9) - GDP - Economic Growth Should Remain Anemic, Flatlined at 2.2%
  6. NSR H1 2020 (8) - Inflation Set for a Double Whammy in 2020!
  7. Year Ahead 2020 - Re-risking The Financial System
  8. NSR H1 2020 (7) - Currency - How Long Can The CBN Keep Up?
  9. NSR H1 2020 (6) - Balance of Payment - Edge of the Cliff
  10. NSR H1 2020 (5) - EM Portfolio Flows - Happy Days Ahead for EM Foreign Portfolio Flows
  11. Fitch Revises IHS's Outlook to Negative; Affirms at 'B plus'
  12. Fitch Revises Outlook on UBA Subsidiaries to Negative on Parent Action
  13. NSR H1 2020 (4) - Commodity Prices - Contrasting Fortunes for Global Soft Commodity Market
  14. NSR H1 2020 (3) - Global - After a Slowdown in 2019, 2020 Growth Receives a Timely Boost
  15. NSR H1 2020 (2) - Crude Oil - Tug of War; the Bears Win
  16. NSR H1 2020 (1) - MEA Region: Modest Growth With Positive Outlook
  17. Top Priorities for the African Continent 2020-2030
  18. Global Growth: Modest Pickup to 2.5% in 2020 amid Mounting Debt and Slowing Productivity Growth
  19. Economic Associate's Conference on 'Nigeria's Economic Outlook' To Hold On Feb 19, 2020
  20. Meristem Research 2020 Outlook - Finding Alpha Amidst The Haze
  21. Nigeria in 2020: Awakening the Sleeping Giant
  22. Nigeria's Economy in 2020; Understanding The Past, Preparing For The Future

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
Related News