"We see the collapse in oil and other commodity prices as the main channel for the economic difficulties resulting from the coronavirus outbreak for countries in Africa and the Middle East," reads a note on the impact of the outbreak on the African continent.
"For large sub-Saharan African producers like Angola and Gabon, a 10 dollars drop in oil has an impact on revenues equivalent to 1 to 2 percent of GDP," analysts warn.
"The demand shock will have a substantial negative effect on tax revenues, foreign currency flows and economic growth for a number of countries" in this region, the analysts add in the note sent to customers, to which Lusa had access.
In recent days, the price of oil has fallen significantly, now worth around 40 dollars, which puts the figure well below the forecast in Angola's State Budget for this year, which foresees an average annual value of oil of 56 dollars per barrel.
In the report, Fitch, which last week worsened Angola's rating due to lower oil prices and production and an increase in public debt, wrote that "Angola has little budgetary margin to withstand a shock.
"Angola's downgrading reflects the impact of lower oil production, with cheaper prices, and a greater than anticipated drop in the kwanza, which has increased public debt levels and the costs of servicing foreign debt, while levels of international reserves have also fallen," analysts wrote.
In the announcement, and which sinks the note into non-investment territory, or rubbish, as it is generally known, the rating agency says that "solid progress on reforms, in the context of the programme agreed with the International Monetary Fund (IMF), has not been sufficient to prevent the deterioration of public finances, and although a rapid fall in public debt is expected under the programme, the risks [of the fall] are high.
In the text accompanying the announcement of the 'rating' decision, Fitch writes that public debt stood at 81 per cent at the end of 2018 and exceeded 100 per cent at the end of last year, "well above the average of 56.2 per cent for countries with a B rating".
