Standard & Poor’s restored to “B-” rating of the Congo – Brazzaville – Jeune Afrique

 The US agency has released the sovereign rating of the country of the “partial default” category, after Brazzaville has paid arrears on an international loan. Standard & amp; Poor’s stresses, however, the fall in external liquid assets of the country.

In a statement released on the evening of Tuesday 09 August at the close of European financial markets, Standard & amp rating agency; Poor’s (S & amp; P) announced that it had raised to “B-” with a stable outlook, the rating on the sovereign bonds of long-term Congo – Brazzaville

S & amp;. P had lowered the last week in “SD / D” in the category of bonds in partial default, after Brazzaville failed to set the deadline of June 2016 for its eurobond from 2007 to 2029, due to an “administrative error”.

A backlog of which the Congolese Government met Monday night with the bondholders of this international loan, according to information from the Euroclear clearing agency. A payment of the same order (about 0.2% of GDP) is expected in December. The last payment on this debt is expected in 2029.

Funding the deficit

In its report, the rating agency examines the evolution international reserves of the country

Standard & amp. Poor’s believes that “after several years of budget surpluses, the financial situation of Congo has deteriorated since 2014, with a deficit exceeding 10% of GDP in 2015,” consequence of the decline in oil prices, the main source of foreign currency . foreign country

“We expect that the budget deficit will average 6% of GDP between 2016 and 2019,” says S & amp; P’s report

the agency. recalls that “to finance the budget deficit, the government has so far chosen to withdraw most of its deposits with the Bank of Central African States (BEAC), which have fallen about 40% in 2015 and its assets in China, which have fallen about 50% in 2015 “

According to Standard & amp estimates. Poor’s, the international reserves of the country at the BEAC declined to just over $ 2 billion [an IMF report projected the other hand, to 2194 billion CFA francs ($ 3.65 billion) a year last].

foreign assets

because of this “lower liquid foreign assets” of Congo – Brazzaville and worsening the current account deficit (expected at 15% of GDP between 2016 and 2019, against -5.2% in 2014 and a surplus of 3.7% in 2010), the rating agency believes that the net external debt [ net external liabilities ] is expected to reach 392% of the proceeds of current transactions this year before slowly back to 321% in 2019.

It was less than 100% in early the decade

. Joel Tee-Lesya