SA is not alone, Africa has a plethora of countries that have junk status, here’s the list…

by CNBC Africa 3,102 views0

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South Africa is among a plethora of countries on the continent whose long-term foreign currency credit rating is rated junk by S&P Global Ratings whilst Botswana is the only country with a very strong investment grade. According to the table below, the majority of country’s on the continent rated by the organisation are rated at junk making the cost of borrowing excessive. S&P’s ratings express its opinion about the ability and willingness of a government, to meet its financial obligations in full and on time.

The agency states that “credit ratings can also speak to the credit quality of an individual debt issue, such as a corporate or municipal bond, and the relative likelihood that the issue may default”.

S&P describes those with an:

  • A investment grade as “having a very strong capacity to meet their financial commitments but somewhat susceptible to adverse economic conditions and changes in circumstances”.
  • BBB – adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
  • BB speculative grade – less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
  • B speculative grade – more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.
  • D – speculative grade, payment default on a financial commitment or breach of an imputed promise, also used when a bankruptcy petition has been filed or similar action taken.
Country Rating Outlook Date
 Algeria Not rated
 Angola B Negative 2016/08/12
 Benin Not rated 2013/11/01
 Botswana A- Negative 2016/04/29
 Burkina Faso B- Positive 2016/05/27
 Burundi Not rated
 Cameroon B Stable 2012/02/20
 Central African Republic Not rated
 Chad Not rated
 Congo, D. R. B- Negative 2016/02/05
 Congo, Republic B- Stable 2016/08/09
 Djibouti Not rated
 Egypt B- Stable 2016/11/11
 Equatorial Guinea Not rated
 Eritrea Not rated
 Ethiopia B Stable 2014/05/09
 Gambia Not rated
 Ghana B- Stable 2014/10/24
 Guinea Not rated
 Guinea-Bissau Not rated
 Kenya B+/B Stable 2017/04/07
 Liberia Not rated
 Libya Not rated 2011/03/10
 Madagascar Not rated 2009/05/11
 Malawi Not rated
 Mali Not rated 2008/07/03
 Mauritius Not rated
 Morocco BBB- Stable 2014/05/16
 Mozambique SD 2017/04/06
 Namibia Not rated
 Niger Not rated
 Nigeria B Stable 2016/09/16
 Rwanda B Stable 2016/09/09
 São Tomé and Príncipe Not rated
 Senegal B+ Stable 2013/07/05
 Seychelles Not rated 2009/08/17
 Sierra Leone Not rated
 Somalia Not rated
 South Africa BB+ Negative 2017/04/03
 South Sudan Not rated
 Sudan Not rated
 Swaziland Not rated
 Tanzania Not rated
 Togo Not rated
 Tunisia Not rated 2013/12/18
 Uganda B Stable 2014/01/17
 Zambia B Negative 2016/03/18
 Zimbabwe Not rated

Source: Wikipedia