A new initiative launched by the United Nations Development Programme (UNDP) to help sub-Saharan African and other developing countries to obtain sovereign credit ratings has yielded its first result, with <
“Through this project, the UNDP intends to support countries in their efforts to mobilise resources from private capital markets, which are required to secure accelerated rates of economic growth and reduce poverty,” says UNDP Associate Administrator Z éphirin Diabr é.
“Sovereign ratings on the African continent are likely to double in the year ahead thanks to the UNDP initiative, which is well under way,” adds Konrad Reuss, Standard & Poor’s credit analyst and managing director for sovereign ratings in Europe, the Middle East, and Africa.
Although many of the governments rated under the new initiative will not use their ratings for immediate access to international bond markets, these ratings will help to integrate African countries into international capital markets over the coming years.
Currently, seven countries on the African continent have sovereign credit ratings from Standard & Poor’s. The Republic of Botswana is on a par with many western governments with its ‘A’ long-term foreign currency rating. The Republics of South Africa and Tunisia (both ‘BBB’) also have solid investment-grade ratings. The Arab Republic of Egypt is at the top of the speculative-grade category with a ‘BB+’ long-term foreign currency rating, followed by the Kingdom of Morocco (‘BB’). The long-term rating on the Republic of Senegal, and now Ghana, is ‘B+’. With this new rating, Ghana compares with countries such as the Federative Republic of Brazil (‘B+’), and has a higher credit standing than the Republics of Turkey (B) or Indonesia (‘B-‘).