Africa sovereign credit rating review: 2021 End of year outlook

Abstract

The Second Half of 2021 (2021H2) witnessed a moderate improvement of creditworthiness across Africa with nine countries being assigned a positive sovereign credit rating action compared to only two in the First Half of 2021 (2021H1). This is eight times more positive sovereign credit rating in comparison to the same period in 2020 (2020H2), where only one country was assigned a positive rating outlook – Nigeria. The rating upgrades in 2021H2 were mainly driven by prospects of faster and stronger economic recovery as countries advance to contain the COVID-19 pandemic through mass vaccinations. Of the nine countries with positive rating actions in 2021H2, all of them had rolled out national vaccination programmes with an average national coverage of 14% being fully vaccinated. This 4th edition of the African Union - African Peer Review Mechanism (AU-APRM) end of year bi-annual sovereign credit rating review report presents an analysis of the long-term foreign currency sovereign credit rating actions in Africa by three dominant international credit rating agencies –Moody’s, Fitch and S&P Global – during the second half of 2021 (2021H2) and makes recommendations to African countries on how to improve their ratings.