Tanzania criticised Moody’s decision to impose a negative outlook on the country’s first international credit rating, saying the agency’s concerns about the business climate were misleading.

A Moody’s sign is displayed on 7 World Trade Center, the company’s corporate headquarters in New York, February 6, 2013. REUTERS/Brendan McDermid

Moody’s on Friday assigned Tanzania a “B1” credit rating with a negative outlook, the first time the country has been given a rating by any of the big international agencies.

Moody’s said the negative outlook was justified by unpredictable policymaking, which could affect economic growth and the ability to attract foreign investment.

The government in the East African nation has tussled with mining and energy firms, as it sought to renegotiate their contracts, alarming foreign investors.

“Tanzania rejects the negative outlook on the credit rating. The government expected Moody’s to sit down with the government to discuss any queries they may have after their review,” Ben Mwaipaja, a Ministry of Finance and Planning spokesperson, said on Monday.

He said the government had taken several steps to improve the business environment, without offering details.

Tanzania has prioritised infrastructure investment as part of a five-year national development plan with a goal of achieving middle income status by 2025.

Moody’s said Tanzania’s debt could rise to 43 percent of GDP in 2020 from 40.2 percent last year. Nevertheless, the agency expects the debt burden to remain below that of regional peers.

“The average maturity of Tanzania’s debt is relatively long because of a large share of multilateral, concessional external borrowing, which helps partly offset a very low revenue base and supports debt affordability,” the agency said in a statement.

Analysts said a “B1” rating, even with a negative outlook, was decent, given worsening debt profiles across Africa.

“It’s a similar rating to Ethiopia, better than Rwanda, better than Kenya. So as a debut issuer, it’s a decent rating,” Charles Robertson, chief economist at London-based frontier and emerging markets investment bank Renaissance Capital, said.

“Given Tanzania’s low per capita GDP, its a good rating.”

In 2016, Tanzania said it wanted to issue a debut Eurobond to finance infrastructure projects, but it has delayed the process due to a lack of a credit rating.

Mwaipaja did not comment on the plan to issue a Eurobond.

Robertson said the Moody’s rating suggested a Eurobond might be issued this year and foreign investors who like diversification would be interested in Tanzania.

“Investors might give Tanzania lower borrowing costs than Kenya, based on this rating,” he said, referring to Kenya’s issue of dollar bonds last month.