Fitch Ratings expect neutral outlook for SSA sovereigns in 2025

In the year 2025, Fitch Ratings expects the outlook for sub-Saharan Africa sovereigns to be neutral, reflecting a stronger macroeconomic outlook and modest fiscal consolidation balanced against challenging financing conditions and political and insecurity risks. The ratings firm anticipates positive momentum in Nigeria and South Africa, which is likely to generate positive spillovers as tighter policies are expected to help tame inflation. Paul Gamble, Head of Middle East and Africa Sovereigns at Fitch Ratings, recently discussed the report's findings. Gamble highlighted that Cameroon is the only sovereign in the region with a negative outlook, marking a significant departure from the norm. This is the first time since 2007 that only one sovereign has been designated with a negative outlook. The uncertainty surrounding policy ahead of the elections is a major factor contributing to this negative outlook in Cameroon. The potential for fiscal policy slippage and challenges in public finance management and debt repayment, particularly domestic debt repayment, are key concerns in the region. Additionally, the uncertainty regarding the succession of the aging president in Cameroon adds to the overall uncertainty in the country. On the other hand, with the upcoming presidential elections in Cote d'Ivoire, Fitch Ratings believes there will likely be policy continuity. The alignment of the main candidates on policy priorities reduces concerns around potential policy disruptions post-election. The economic outlook remains relatively stable, with minimal risks from a policy perspective. Overall, the outlook for sub-Saharan Africa sovereigns in 2025 is expected to be neutral, with some countries facing more challenges than others in navigating the economic and political landscape.