Fitch Ratings anticipates a neutral outlook for sub-Saharan African (SSA) sovereigns in 2025. The UK-based agency attributes this to a mix of stronger economic conditions and moderate fiscal adjustments, counterbalanced by persistent financing challenges, as well as political and security risks.

The agency projects an improvement in Gross Domestic Product (GDP) growth, driven by economic reforms and recovery from adverse events such as droughts. It highlighted that positive momentum in Nigeria and South Africa, the region’s two largest economies, will have beneficial spillover effects across SSA.

Fitch also expects tighter monetary policies to help control inflation, while economic growth and fiscal reforms are likely to lower the region’s government debt-to-GDP ratios. Additionally, reduced policy rates should alleviate domestic borrowing costs.

However, the agency warns that median financing costs will continue to climb, with many countries facing high interest-to-revenue ratios. This will pose significant challenges, especially for nations with weaker credit ratings, such as Ghana.

Despite these difficulties, Fitch expects the three Common Framework debt restructuring processes in the region to conclude by 2025.

Source: TheDotNews