Thursday, July 20

Slow progress for North African ratings

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The Africa Report

Ratings agencies have been tough on North African countries in the past year.

Egypt and Tunisia now have democratically elected governments that are negotiating new financial deals to improve their economic outlook.

But despite Egypt’s June elections, the country’s outlook remains negative, according to credit rating agency Fitch.

Its long-term sovereign rating is B+, down from a BB+ a year ago.

Standard & Poor’s (S&P), also unconvinced of political stability, recommended a credit watch on the long-term B rating, with the possibility of a downgrade.

Over the past year there has been little change in the agencies’ prognoses for Morocco and Tunisia, both of which received a BBB score from Fitch for their long-term sovereign rating.

For Morocco, Fitch says that the outlook remains stable, whilst Tunisia’s has been kept negative. S&P revised the country’s outlook to stable from negative a year ago.

Libya’s last Fitch and S&P assessments were in March 2011, when it got a BB rating from both ahead of the fall of Muammar Gaddafi in October.

S&P gave a negative outlook whilst Fitch placed it on a negative watch.

The new government has held numerous oil and gas investment drives. Given this push, a new credit rating would no doubt be welcomed.

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