The rating agency Moody's revised, Friday, August 7, 2020, a series of sovereign ratings in Africa and Asia considering that the commitment of the countries considered in the G20 debt service suspension initiative ((DSSI) is a potential threat to private creditors.

The two rare investment grade in the Sub-Saharan Africa region, namely Senegal and Côte d'Ivoire, retain the Ba3 rating, i.e. the last "investment grade" level from Moody's, meaning "average value quality, level of credit risk moderate, likely to have certain speculative characteristics”. However, Côte d'Ivoire is assigned a “stable outlook” while Senegal is in a “negative outlook”.

The negative outlook on Senegal's rating reflects risks related to the relatively high central government debt burden, which will reach around 65% of GDP in 2021 from 56% in 2019 and 325% of revenue. "The coronavirus shock is worsening an upward trend in debt burden that began before the shock," Moody's said.

For Côte d'Ivoire, the stable outlook reflects Moody's view that the pressures facing the rating as a result of the coronavirus should remain consistent with the current rating level.

As for Cameroon, it sees the renewal of its “B2” rating, 5 notches below Senegal and Côte d'Ivoire, with a stable outlook, concluding the review initiated on May 27th. “The review of the downgrade reflected Moody's assessment that the country's participation in the G20 Debt Service Suspension Initiative (DSSI) has increased the risk that private sector creditors will suffer losses.

While the agency continues to believe that the implementation of the G20 initiative (DSSI) poses risks for private creditors, the decision to conclude the review and confirm the rating reflects Moody's assessment that , at this stage, for Cameroon, these risks are correctly reflected in the current B2 ranking.

Similarly, Ethiopia is at the same B2 rating with “negative outlook”. Moody's expects GDP in the plateau country to slow to 2% in fiscal 2020 and 2021. As a result, and despite the government's revenue collection measures, Moody's expects government revenue to decline between 11 and 11.5% of GDP for a budget deficit of 5% compared to 2.5% during the 2019 financial year.