The consultant NKC African Economics considered that none of the credit rating agencies should improve Mozambique’s rating in the next 12 months due to the difficult economic conditions aggravated by the covid-19 pandemic.
“We do not expect any major credit rating agencies to increase their ratings in the next 12 months due to the high economic and political risks that are unlikely to dissipate during this period,” write the analysts.
In a comment to the maintenance of Mozambique’s CCC + rating by Standard & Poor`s (S&P), sent to clients and to which Lusa had access, analysts write that “the main risks for the country are a prolonged covid-19 crisis that adversely affects the global demand for raw materials from Mozambique, as well as a possible escalation in the violence in Cabo Delgado that makes more investments in the sector of liquefied natural gas difficult. ”
On Friday, S&P announced that it decided to keep Mozambique’s rating at CCC +, below the investment recommendation, with a Stable Evolution Perspective, due to the economic effects of the covid-19 pandemic.
“The CCC + rating for foreign currency debt issuance reflects our view that Mozambique depends on favorable business, financial and economic conditions to meet its financial obligations”, write the analysts in the note accompanying the rating decision, released on Monday night.
The CCC + level is the third lowest in the scale of opinion on the quality of sovereign credit, being considered junk or junk because it is several levels below the level of the investment recommendation.
