Botswana, Mauritius and Morocco the only African countries with investment grade status

After South Africa credit ratings was downgraded to junk status, now we examine African countries which still have investment status in accordance with the three major rating agencies: S&P, Fitch and Moody’s.

Botswana

S&P =BBB+   Moody’s =A2  Fitch =Unavailable Central bank rate =4.75%

Botswana has two investment grades with Moody’s keeping them at A2, the highest by any African country rated by the major three rating agency. No African country other than Botswana holds the Upper-medium grade. Botswana spent the first of the last two decades in the Upper Medium grade by S&P before being downgraded to A- from A in August 2009 citing uncertainties surrounding the country’s spending plans at a time of falling revenue. Botswana diamond output accounted 22% for total global diamond output and accounted for half of government revenue. During the financial crisis, they would then halve their output and suspend most of the diamond activities and the 2009 recession started running through tourism industry as arrivals saw a sharp decline. It would then take them another decade in the Upper medium(low) grade before being downgraded into lower medium grade in March 2020 raising a prolonged fiscal and external deficits. Again, at the center of the matter is the perturbed diamond market which could aggravate the weakening fiscal and external balance sheet of the country.

The Country has been in A2 status for the past two decades with only changes seen in outlook over that period. 

Mauritius

S&P= Unavailable      Moody’s =Baa1  Central bank rate =2.85%

Moody’s rated Mauritius at Baa2 between 1996 and 2012. Moodý’s upgraded Mauritius investment status to Baa1 in 2012 citing strengthening of institutional framework allowed the economy to withstand the negative impact of both the financial crisis and euro crisis. Mauritius had also made progress in diversifying the economy by enticing more FDI from multiple sources. The country made strides to broaden its economic cooperation with China & India.

Morocco

S&P =BBB- Moody’s =Ba1 Fitch =BBB- Central bank rate =2.00%

Currently the S&P rates at BBB-, Moody’s at Ba1 and Fitch at BBB-. S&P upgraded Morocco into the investment grade for the time in period reading between 2001 to 2020 in 2010 stating high political stability and the government’s momentum for its programme, including large public works which has raised Morocco’s trend growth prospects and contributed to improve gradually the country’s still weak social indicators. During the same period, Moody’s ratings on the north African country has been constant at Ba1 only outlook had changes. Fitch last updated their ratings on Morocco in 2007 and its been constant since.