Sub-Saharan Africa’s commodity export gains declining – Moody’s
Despite efforts by Sub-Saharan Africa countries to diversify economies and accumulate buffers, their commodity exporters remain vulnerable to commodity price shocks, according to a Moody’s report.
“The most recent collapse in the prices of oil, copper and iron ore, amongst others, has slowed growth significantly, increased fiscal and external imbalances, and weakened currencies,” the ratings agency said in a report released December 11.
Other highlights in the report are:
In general, the region’s oil exporters have been affected more than metals and mining exporters. Among Moody’s rated SSA commodity exporters, Angola, the Republic of the Congo and Gabon have the most oil-reliant economies.
Despite diversification efforts, the region’s economies are less diversified than it was two decades ago. Export diversification and economic complexity are lower among SSA oil exporters than among peers in developing Asia or Latin America.
Fiscal and current account balances bear the brunt of the commodity shock. In several African frontier markets, the share of foreign-currency denominated debt has risen and there has been an increase in international bond issuance. Angola, Ghana and Zambia are among the most affected countries.
Recent sovereign rating actions in SSA reflect weakening trend growth, widening twin deficits and rising uncertainty about the capacity of the governments to consolidate their finances.