"Fitch estimates that the ratio of public debt to GDP will be higher at the end of this year in Cape Verde, with 157 per cent of GDP, followed by the Republic of Congo, with 115 per cent, Mozambique, with 113 per cent, Zambia with 110 per cent and Angola with 108 per cent," reads a report on the economies of sub-Saharan Africa.
In the document, sent to investors and to which Lusa had access, analysts from Fitch Ratings, owned by the same owners as Fitch Solutions, said that the rise in this ratio since 2012 was highest in Zambia, where it rose 86 percentage points, followed by Angola (82 points) and Mozambique, with 73 percentage points.
"The debt burden for sub-Saharan African governments is rising at a faster pace and to higher levels than other emerging markets, highlighting the risk of further downgrades in the rating and financial defaults," the analysis says.
The effects of the spread of the covid-19 pandemic and the oil shock "are having a severe impact on the region," writes Fitch, pointing out that "real GDP is expected to fall by 2.1 per cent on average this year, and budget deficits are expected to widen from 4.9 per cent last year to 7.4 per cent this year.
The worsening economic conditions in these countries, which include Portuguese-speaking countries Angola, Cape Verde and Mozambique, did not start with the pandemic, says Fitch Ratings, noting that the worsening of macroeconomic conditions has been underway for a decade and will be difficult to reverse.
Since the beginning of March, Fitch has downgraded the rating of seven of the 19 countries to which it attributes an opinion on sovereign credit quality, "reflecting both the severity of the impact of the new coronavirus and the limited margin of resilience of the countries after the rapid rise in debt, and due to other credit vulnerabilities".
The trend, they conclude, is expected to continue: "The increase in debt burden, the impact of the new coronavirus and the oil shock point to more downward pressure on the ratings of sub-Saharan African countries".
