More African nations set for credit rating upgrades as reforms gain traction

Several African countries could secure investment grade credit ratings by next year as economic reforms begin to bear fruit and growth gathers pace across the continent, according to African Development Bank president Sidi Ould Tah.

Speaking in an interview with Bloomberg, Ould Tah said confidence is growing that African economies will continue to strengthen, leading to improved assessments from global ratings agencies.

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“We’re quite confident that the continent will continue to grow very strong and that African countries will be better rated in the coming years,” Ould Tah said. “We’ve seen Morocco receive investment grade during the last few months and we expect other countries by next year to get toward that.”

A number of African sovereigns have already received favourable ratings actions in recent months. Morocco was upgraded to investment grade by S&P Global Ratings last year, while South Africa received a one notch upgrade in November. Nigeria’s credit rating was also raised in May. Ghana, Zambia, Ivory Coast and Kenya have similarly benefited from positive ratings actions linked to fiscal consolidation, debt management and broader economic reforms.

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The improved outlook comes as governments across the continent work to strengthen public finances, reduce debt pressures and restore investor confidence after years of economic shocks.

Credit rating upgrades are significant because they can reduce the cost of borrowing in international markets, making it easier for governments to finance infrastructure projects and development programmes.

Investor sentiment towards African debt has also improved. The premium investors demand to hold African bonds over United States Treasuries has fallen to 304 basis points from a peak of 405 basis points in early April, reflecting a reassessment of the risks posed by global geopolitical tensions.

The African Development Bank expects the continent’s economic growth to accelerate to 4.4 per cent next year from 4.2 per cent this year, provided the conflict in the Middle East does not intensify or persist for an extended period.

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While higher oil prices triggered by the conflict have benefited major African oil exporters such as Nigeria, Angola and Gabon, they have increased fiscal pressures for net energy importing countries including South Africa, Kenya, Ghana and Senegal.

Ould Tah said the African Development Bank stands ready to assist countries facing budgetary challenges and rising debt burdens linked to the crisis.

“The board of directors of the bank will examine in the coming days how the bank can increase the volume of resources it will provide to its member countries in this specific situation,” he said.

The comments underscore growing optimism about Africa’s economic trajectory, with policymakers hoping that sustained reforms, stronger fiscal discipline and rising investor confidence will help more countries achieve investment grade status in the years ahead.