Moody's downgrades Angola's ratings to B-minus, outlook stable

Moody's Investors Service has downgraded Angola's sovereign rating to B negative, with a stable outlook, reflecting the impact of lower oil production and prices. This downgrade comes at a time when the oil price hovers around $50, causing distress for oil-dependent economies like Angola. Ridle Markus, an Africa Strategist at Absa Corporate and Investment Banking, joined CNBC Africa for the Africa Exchange segment to discuss the implications of this downgrade and other economic developments in Africa. Markus highlighted that the low oil prices are likely to persist, making downgrades a common occurrence in oil-producing nations, not limited to Angola. Nigeria also faced a downgrade recently, attributing it to declining oil production. In Angola, oil production has dwindled due to aging infrastructure and a challenging investment environment. However, Markus remains optimistic about Angola's reforms and the influx of investments in the oil sector, which could mitigate the impact of the downgrade. Moving to Mauritius, Markus noted the island's inflation rate had marginally increased to 2.1% in February, a modest figure that the Monetary Policy Committee (MPC) is expected to overlook in light of the looming threat of the COVID-19 virus. The tourism sector in Mauritius had a difficult 2019, and with the coronavirus outbreak, the future looks even more challenging, as tourist numbers plummet. Markus emphasized the significance of European and Asian tourists for Mauritius, with the virus disrupting growth potential from Asian markets. Lastly, Nigeria's Senate approved President Buhari's plan to borrow $22.7 billion for infrastructure projects. While the sum falls short of addressing Nigeria's extensive infrastructure needs, Markus believes it is a feasible amount, given the country's capacity constraints. The effectiveness of the implementation is crucial, as Nigeria has struggled with executing infrastructure projects in the past. The infrastructure investments in power, transportation, housing, and agriculture could potentially boost employment and stimulate growth in Nigeria, although challenges remain in securing the funds and ensuring successful project delivery amidst sluggish economic growth and volatile oil prices.