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<p>Just last week finance minister Tito Mboweni outlined the emergency budget to nurse South Africa through the Covid-19 crisis. A big part of this budget was a plan for South Africa to get its debt under control within four years. Fitch Ratings, the agency that downgraded South Africa in April doubts whether South Africa can do this. CNBC Africa’s Chris Bishop spoke to Jan Friederich, Senior Director of Fitch Ratings for more.</p>


Fitch expresses doubt over SA’s debt consolidation plans


<p>ABUJA/LAGOS (Reuters) &#8211; A sharp rise in Nigeria’s sovereign debt and a ballooning financing gap could trigger a rating downgrade as policymakers in Africa’s biggest economy struggle to deal with the fallout from a coronavirus-induced oil price crash, a director at Fitch said.</p>



<p>The global ratings agency downgraded Nigeria to “B” in April with a negative outlook from “B+” citing aggravation of pressure on external finances.</p>



<p>Moody’s said in April it would likely downgrade the country if the government was unable to alleviate the damage to its revenue and balance sheet. S&amp;P cut Nigeria’s rating in March on weakening external finances.</p>



<p>Nigeria &#8211; also Africa’s top oil exporter &#8211; is under increasing pressure to stimulate growth and cut debt after its first quarter current account turned negative, overvaluing its naira currency. The oil price slump has slashed government revenues.</p>



<p>“We have two elements that could lead us to take a negative rating action/downgrade on Nigeria. Aggravation of external liquidity pressures and a sharp rise in government debt to revenues ratio,” Mahmoud Harb, sovereign ratings director at Fitch, told Reuters.</p>



<p>The debt to revenue ratio for Nigeria is set to worsen to 538% by the end of 2020, from 348% a year earlier, before improving slightly next year, Harb said. The medium debt ratio for “B” rated countries is 350%, he said.</p>



<p>Nigeria will need $23 billion to meet its external financing needs this year, Fitch estimates, noting that the country only has few options, including running down its reserves, after shelving plans to issue Eurobonds.</p>



<p>Abuja’s foreign currency reserves could fall to $23.3 billion this year if foreign exchange access is normalised, Harb said, from around $36 billion.</p>



<p>Nigeria has been restricting access since the pandemic to boost the naira, similar to a step it took when oil prices crashed in 2015, which worsened a 2016 recession.</p>



<p>The central bank is yet to provide currency to investors that need to leave Nigeria, weakening sentiment. Analysts estimate that around $2 billion needs to exit Nigeria.</p>



<p>Nigeria could avoid a ratings downgrade if it strengthens its finances, reforms its forex policy and shows a path to reducing its deficit by boosting non-oil revenues, Fitch’s Harb said.</p>



<p></p>


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Nigeria’s rating at risk as debt, financing gap rise-Fitch

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<p>Fitch Ratings has for the first time rated Development Bank of Rwanda at B+, reflecting the bank’s stable outlook. The rating also demonstrates BRD’s ability to raise external financing in case of need. Vincent Ngirikiringo, the bank&#8217;s Chief Finance Officer joined CNBC Africa and shared an update on the 3 year $24.42 million recapitalisation plan by the government.</p>


Development bank of Rwanda earns B+ Fitch Ratings

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<p>Fitch Ratings say the credit profiles of Nigerian banks faces severe risks from the slump in oil prices and a disruption in the operating environment due to the coronavirus pandemic. Fitch noted that the weighted -average cost of risk for Nigerian banks its rates rose by 200 basis points during the 2015 oil price shocking they do not rule out a similar increase this year. Mahin Dissanayake, Senior Director at Fitch Ratings joins joins CNBC Africa for more.</p>


Fitch: Nigerian banks at severe risk from oil price slump & COVID-19


<p>JOHANNESBURG (Reuters) &#8211; South Africa’s rand plunged to an all-time low on Monday, falling below 18.00 to a dollar after ratings firm Moody’s cut the country’s last investment grade credit rating, adding to mounting panic about the coronavirus outbreak.  </p>



<p>At 0600 GMT the rand was 1.42% weaker at 17.9100 per dollar, pulling back slightly from the all-time low of 18.0800 it crashed to in Asian trading, indicating that the fallout of the coronavirus-led lockdown is likely to hurt local assets. </p>



<p>Moody’s downgraded the rating one notch to ‘Ba1’ from ‘Baa3’ and maintained a negative outlook, meaning another downgrade could follow if the economy performs worse or government debt rises faster than expected. </p>



<p>It was the last of the top three ratings firms to downgrade Africa’s most industrialised economy to sub-investment grade, following S&amp;P Global and Fitch’s downgrades in 2017. </p>



<p>The latest ratings cut will see South Africa kicked out of the benchmark World Government Bond Index (WGBI) of local-currency debt, triggering up to $12 billion of forced selling, treasury and analysts estimate.     </p>



<p>Bonds were also weaker, with yield on the benchmark government bonds due in 2026 rising 72.5 basis points to 11.215%.</p>



<p>“We have previously argued that much of the downgrade has already been priced in and that we do not expect a capital exodus following the decision,” analysts at NKC Economics said in a note.  </p>



<p>“However, the global economic environment has changed considerably since the start of March.”  </p>



<p>South Africa’s confirmed coronavirus cases increased by 93 to 1,280 on Sunday and the death toll doubled to two. The country is its fourth day of a national lockdown and officials announced new measures to deal with the economic fallout. </p>



<p>(Reporting by Mfuneko Toyana; Editing by Vinay Dwivedi)</p>



<p>This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN21H0S6-OZABS">https://af.reuters.com/article/investingNews/idAFKBN21H0S6-OZABS</a> and is republished with its permission.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


South Africa’s rand crashes to its lowest ever after Moody’s pulls the plug

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<p>Recent troubles at South Africa&#8217;s electricity public utility Eskom have led to a revised outlook on the economy by Fitch ratings. For a discussion on the bank&#8217;s reaction to the latest downgrade and if the country&#8217;s monetary policy was ready for it, CNBC Africa&#8217;s Arnold Kwizera caught up with South African Reserve Bank (SARB) Governor, Lesetja Kganyago for more.</p>


How does Eskom downgrade affect monetary policy? A revised look at economic stability

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<p>Ratings agency Fitch has revised its outlook on South Africa from stable to negative.  The ratings agency also kept South Africa&#8217;s long-term foreign and local currency debt on BB plus but has sited its concerns about the country’s overall growth potential. Mahmoud Harb, Director at Fitch Ratings joins CNBC Africa for more.</p>


Fitch: What the negative outlook on SA means

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<p>Fitch Ratings say achieving the new loan-deposit ratio (LDR) requirement by the Central Bank of Nigeria (CBN) in such a short time will be very difficult for some banks given their current lending levels, particularly if customer deposits continue to grow at present rates. Mahin Dissanayake, Senior Director, for EMEA Financial Institutions Group at Fitch Ratings joins CNBC Africa for more.</p>


Fitch: Achieving new loan-deposit ratio requirement might be difficult for some Nigerian banks

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<p>Fitch Ratings says the requirement for Nigerian banks to have a loan-to-deposit ratio of at least 60 per cent at the end of September is credit-negative for Nigeria&#8217;s banking sector. Muyiwa Oni, Regional Head; Equity Research at Standard Bank Group joins CNBC Africa for more.</p>


CBN’s loan to deposit ratio requirement credit negative for Nigerian banks – Fitch

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<p>International rating agency Fitch, has suggested that the victory of the ANC in this year’s general elections matches their view that a big economic policy shift is unlikely in South Africa. Jan Friederich, Head of Middle East and Africa Sovereign Ratings, Fitch Ratings joins CNBC Africa for more on Fitch ratings election highlights.</p>


Weak reform momentum weighs on SA’s sovereign rating

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<p>Fitch Ratings says the merger between Diamond and Access Bank will result in the five largest banks in Nigeria having more than 60 per cent of the market share when measured by assets.  Mahin Dissanayake, Senior Director, for EMEA Financial Institutions group at Fitch ratings joins CNBC Africa from London to assess the proposed merger.</p>


What you need to know about the Diamond & Access Banks merger

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<p>Fitch ratings say operating conditions in Nigeria are recovering given improving oil prices. However, Fitch warns that the operating environment for banks is difficult with minimal sector loan growth and pressure on margins and capital. Olamipo Ogunsanya, Research Analyst at Renaissance Capital joins CNBC Africa as we focus on the Nigerian banking sector.</p>


Nigerian banks continue to face challenges

<p>JOHANNESBURG (Reuters) &#8211; South African President Cyril Ramaphosa’s multi-billion dollar plan to turnaround the economy will do little to lift the country’s sluggish economic growth rate, ratings agency Fitch said on Tuesday.</p>
<p>“South Africa’s latest economic plan is unlikely to deliver a significant boost to economic growth,” said Fitch, which rates Pretoria’s foreign and local currency debt at subinvestment, adding that rand’s recent plunge would also hinder the plan.</p>
<p>“The plan does include measures that could support growth, but many relate to long-standing policy ideas that have been slow to implement,” Fitch said of the plan announced by Ramaphosa on Friday to pull the economy out of recession.</p>
<p>Reporting by Mfuneko Toyana; Editing by Ed Stoddard</p>


Fitch_Flickr

Why Fitch thinks South Africa’s #StimulusPackage is unlikely to boost growth in the country’s economy

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<p>Political uncertainty will persist in South Africa following the election of Cyril Ramaphosa as leader of the ANC and this is according to Fitch Ratings. Joining CNBC Africa to unpack this further is Ed Parker, Fitch&#8217;s Head of EMEA Sovereign Ratings.</p>


Is 3% of growth realistic expectation of SA?

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<p>The African Guarantee Fund for Small and Medium-Sized Enterprises has received an Insurance Financial Strength rating of &#8216;AA-&#8216; by globally Fitch Ratings.</p>


Fitch Assigns African Guarantee Fund ‘AA-‘ IFS rating

<p data-reactid="39"> Fitch Ratings’ negative outlook on Kenya’s sovereign debt could be withdrawn if a re-run presidential election goes “relatively” smoothly and debt to GDP levels fall, Fitch said on Thursday.</p>
<p data-reactid="40">Fitch currently rates Kenya as B+ with a negative outlook, and this has not been altered since the decision by the Supreme Court to nullify the presidential election, citing irregularities.</p>
<p data-reactid="41">A new election has been tentatively scheduled for Oct. 17. It means voters will again have to choose between President Uhuru Kenyatta, 55, and veteran opposition leader Raila Odinga, 72.</p>
<p data-reactid="42">“If the second election goes relatively smoothly and &#8230; if they achieve a decline in their debt to GDP levels it could lead to a withdrawal of the negative outlook,” said Jan Friederich, a Fitch analyst for the Middle East and Africa.</p>
<div class="Attribution_attribution_o4ojT" data-reactid="43">
<p class="Attribution_content_27_rw" data-reactid="44">Reporting by Claire Milhench; editing by Marc Jones</p>
</div>


Fitch could stabilise Kenya’s rating if election re-run goes smoothly

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<p>Fitch ratings agency has affirmed Cote d&#8217;Ivoire b+ rating and says that the country&#8217;s outlook is stable. Stephane Hie, Head of Asset Management at Hudson and Co joins CNBC Africa from Abidjan to explain the trends in Cote d&#8217;Ivoire&#8217;s economy.</p>


Fitch Ratings

Fitch expresses doubt over SA’s debt consolidation plans

Nigeria’s rating at risk as debt, financing gap rise-Fitch

Development bank of Rwanda earns B+ Fitch Ratings

Fitch: Nigerian banks at severe risk from oil price slump & COVID-19

South Africa’s rand crashes to its lowest ever after Moody’s pulls the plug

How does Eskom downgrade affect monetary policy? A revised look at economic stability

Fitch: What the negative outlook on SA means

Fitch: Achieving new loan-deposit ratio requirement might be difficult for some Nigerian banks

CBN’s loan to deposit ratio requirement credit negative for Nigerian banks – Fitch

Weak reform momentum weighs on SA’s sovereign rating

What you need to know about the Diamond & Access Banks merger

Nigerian banks continue to face challenges

Why Fitch thinks South Africa’s #StimulusPackage is unlikely to boost growth in the country’s economy

Is 3% of growth realistic expectation of SA?

Fitch Assigns African Guarantee Fund ‘AA-‘ IFS rating

Fitch could stabilise Kenya’s rating if election re-run goes smoothly

Fitch affirms Cote d`Ivoire at ‘B+’, Outlook stable

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Fitch Ratings

Fitch expresses doubt over SA’s debt consolidation plans

Nigeria’s rating at risk as debt, financing gap rise-Fitch

Development bank of Rwanda earns B+ Fitch Ratings

Fitch: Nigerian banks at severe risk from oil price slump & COVID-19

South Africa’s rand crashes to its lowest ever after Moody’s pulls the plug

How does Eskom downgrade affect monetary policy? A revised look at economic stability

Fitch: What the negative outlook on SA means

Fitch: Achieving new loan-deposit ratio requirement might be difficult for some Nigerian banks

CBN’s loan to deposit ratio requirement credit negative for Nigerian banks – Fitch

Weak reform momentum weighs on SA’s sovereign rating

What you need to know about the Diamond & Access Banks merger

Nigerian banks continue to face challenges

Why Fitch thinks South Africa’s #StimulusPackage is unlikely to boost growth in the country’s economy

Is 3% of growth realistic expectation of SA?

Fitch Assigns African Guarantee Fund ‘AA-‘ IFS rating

Fitch could stabilise Kenya’s rating if election re-run goes smoothly

Fitch affirms Cote d`Ivoire at ‘B+’, Outlook stable

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