SSA: Reforms Prove Support Amid Volatile External Environment -Fitch
Economic reforms and generally favourable access to external financing are supporting the resilience of many sub-Saharan African (SSA) sovereigns amid heightened geopolitical tensions and a volatile global environment, Fitch Ratings says in a new report.
Growth across the region is broadly stable, with economic activity increasingly supported by a more diverse range of growth drivers. While higher oil prices have led to some inflationary pressures, inflation remains moderate by historical standards and is being contained through tighter monetary policy in many countries.
According to Fitch, higher prices for several commodity exports, continued remittance inflows, and access to concessional financing and foreign portfolio investment have helped limit pressure on external buffers.
Greater exchange-rate flexibility in several sovereigns has also improved the region’s capacity to absorb external shocks. SSA fiscal performance continues to strengthen as governments pursue revenue-enhancing measures and spending rationalisation.
Fitch forecasts that the median sovereign in the region will record a primary fiscal surplus in 2026, an uncommon outcome historically, supporting a continued decline in government debt/GDP ratios. However, upcoming elections in several key sovereigns, together with growing political and social activism among younger populations, could test the durability of reform momentum.
The region’s rating profile has continued to improve despite the challenging external backdrop, the global ratings agency said. It said the average sovereign rating is now at its highest level since the pandemic, with four upgrades and two downgrades over the past 12 months.
Also, Fitch said the net outlook balance stands at +3, its strongest level since January 2011, while the share of sovereigns with positive outlooks is at a decade high, pointing to the potential for further rating improvements. Lagos Set to Open N200 Billion State Bond for Subscriptions
