COVID-19: Credit rating slides from stable to negative in Botswana

30 Mai 2020

Gaborone, Botswana, May 30 (Infosplusgabon) - International think-tanks at Moody’s have changed Botswana’s sovereign credit rating from stable to negative, authorities at the reserve bank have announced.

Seamogano Mosanako, Head of Communications and Information Services at Bank of Botswana on Saturday issued a communiqué stating that Moody’s latest out-of-calendar review of the credit ratings has affirmed Botswana’s rating of ‘A2’ for long-term bonds denominated in both domestic and foreign currency, and changed the outlook from stable to negative.

According to Moody’s, this update to the recent March 2020 rating, on a date that deviates from the previously published sovereign release calendar, is prompted by the risks associated with coronavirus shocks, given Botswana’s strong dependency on the diamonds industry for growth, exports and budget revenues.

“The revision of the outlook from stable to negative reflects the increasing risks of lower growth, higher budget deficits and likely resultant increase in government borrowing,” said Mosanako.

Mosanako said Moody’s observed that these adverse effects of COVID-19 pandemic, combined with the current challenges the government faces on fiscal consolidation, could mean further deterioration of fiscal metrics to a level not consistent with the ‘A2’ sovereign credit rating.

FIN/ INFOSPLUSGABON/LMP/GABON2020

© Copyright  Infosplusgabon