Fitch Ratings Forecasts Neutral Outlook for Sub-Saharan Africa Sovereigns in 2025
Fitch Ratings has projected a neutral outlook for Sub-Saharan African (SSA) sovereigns in 2025, citing a stronger macroeconomic environment and modest fiscal consolidation as key factors.
The UK-based credit rating agency highlighted that these positive developments would be offset by challenging financing conditions and persistent political and security risks.
According to Fitch, the region’s Gross Domestic Product (GDP) growth is expected to improve, supported by ongoing reforms and recovery from adverse conditions such as drought.
“We forecast growth will improve driven by reforms and recovery from drought. Momentum in Nigeria and South Africa, the two largest SSA economies, will generate positive spillovers,” the report stated.
The firm also noted that tighter monetary policies across the region should help contain inflation. Improved growth, coupled with fiscal reforms, is expected to reduce regional government debt-to-GDP ratios, while declining policy rates should ease domestic financing costs.
Despite these gains, Fitch warned that median financing costs would continue to rise, with interest-to-revenue ratios remaining high for many countries.
This, it noted, poses significant challenges, particularly for nations with lower credit ratings, including Ghana.
On debt restructuring, Fitch anticipates that the three ongoing Common Framework restructurings within the region will be completed by 2025.
However, it emphasized that financing challenges will persist for several SSA countries, given the region’s exposure to global economic pressures and local vulnerabilities.
Fitch’s neutral outlook reflects a balanced view of the opportunities and risks facing SSA economies as they navigate a complex global and regional economic landscape.
