Fitch Ratings has projected that improved economic growth and fiscal reforms will reduce the debt-to-GDP ratio for Sub-Saharan African (SSA) governments, while lower policy rates will ease domestic financing costs.
Despite this, average financing costs are expected to rise further, with interest-to-revenue ratios remaining high across many SSA countries. According to Fitch, countries at the lower end of the rating scale, such as Ghana and Zambia, will continue to face significant financing challenges. Both nations currently hold a CCC+ rating.
The report highlights that the three Common Framework restructurings in the region are anticipated to conclude by 2025. Additionally, two SSA sovereigns have Positive Outlooks, while one has a Negative Outlook—the lowest number of negative ratings in nearly a decade, aside from a brief period in early 2023.
Six sovereigns remain unrated due to severe financing stress, mirroring levels last seen in mid-2021. These stresses are often compounded by weaknesses in public financial management (PFM).
Cameroon’s Negative Outlook reflects ongoing liquidity and budgetary risks, worsened by political and social challenges.
On the positive side, Nigeria and Seychelles stand out. Nigeria’s Positive Outlook is attributed to reforms enhancing policy credibility and reducing economic distortions. Seychelles’ rating reflects robust fiscal performance, resulting in a significant reduction in its debt-to GDP ratio.