Fitch downgrades Namibia to junk

Fitch downgrades Namibia to junk

Fitch on Monday announced it has downgraded Namibia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB+', with a stable outlook.
“The downgrade reflects weaker-than-forecast fiscal outcomes and our projection that public debt-to-GDP will continue to rise over the medium term. This will leave debt in financial year 2019 (FY19, to end-March 2020) at nearly double the ratio in FY14. The downgrade also reflects a weaker-than-expected economic recovery and our view that medium-term growth has shifted to a lower gear,” the ratings agency said in a press release.
They said the accumulation of previously undisclosed arrears by several ministries has shed light on underlying shortcomings in the management of public finances.
The economic outlook through to year 2019 is rated as lacklustre.
“We project GDP growth to strengthen to 2% in 2018 and 3% in 2019, well below the 2010-2015 average of 5.7%. The acceleration in growth will be driven by the rebound in crop production, steady growth in mining output, and stabilisation of public investment,” said Fitch.
Moody's Investors Service in August also downgraded Namibia's long-term senior unsecured bond and issuer rating to junk status.