Credit Ratings and Research Agency, Moody’s has predicted tough times ahead for the Sub-Saharan region in terms of sovereign credit worthiness*.
A report published this week by the American-based Investors Service states that its 2020 outlook for sovereign credit worthiness remains negative.
Moody’s attributes this to the limited progress made in reducing risk related to increased debt burdens (a large amount of money that a country owes to another which they are struggling to repay)and debt servicing.
“While growth will remain solid, it will not meaningfully buttress income nor increase economic resilience,” predicts the respected institution, further adding that the external environment is becoming increasingly unpredictable, which aggregates existing challenges.
The rating agency warns even with the region not highly integrated into the global economy through direct trade linkages, it remains exposed through its sensitivity to changes in commodity prices and financial conditions.
“The limited capacity of most governments to respond to even modest negative external shocks exacerbates the region’s sensitivity to the more negative global environment,” it states.