Moody’s changes outlook on Republic of Congo’s Ba3 rating to negative

Moody’s has changed the rating outlook of the Republic of Congo’s Ba3 issuer rating from stable to negative and affirmed the rating.

According to Moody’s the negative outlook reflects increasing uncertainty regarding the government’s capacity to consolidate its finances amid a protracted oil price shock that has depressed the fiscal and growth outlook, diminishing a historical credit strength supporting the Ba3 rating.

Moody’s outlines the following as the key drivers behind the affirmation of the rating:

1.Moody’s central expectation that government debt metrics will stop
deteriorating from 2017 onward; and

2. limited external risks despite
low oil prices due to the Congo’s membership of the Economic and Monetary Union
of Central Africa (CEMAC in French) and the franc Zone.

The rating agency also notes that the Republic of the Congo’s country and deposits ceilings remain unchanged
at Baa3.

By Emmanuel K. Dogbevi