Fitch Ratings announced on Thursday that African credit ratings are expected to withstand pressures from reduced U.S. aid and global trade tensions.
The agency stated that widespread downgrades are unlikely due to the region’s unique export mix and limited integration into global supply chains, unlike Asia.
While Sub-Saharan Africa has significantly benefited from U.S. aid, particularly through USAID, Fitch suggests nations like South Africa, Namibia, and Ivory Coast remain relatively insulated.
Nigeria and Seychelles are projected to maintain positive credit outlooks, buoyed by ongoing reforms.
Paul Gamble from Fitch noted that these reforms have strengthened the region’s capacity to absorb economic shocks, deeming the ratings impact manageable.
However, Fitch acknowledged potential negative consequences for the poorest nations, where abrupt aid cessation could halt projects and strain fiscal stability.
Ethiopia, Mozambique, Uganda, and Lesotho are particularly vulnerable.
Arnaud Louis of Fitch highlighted the potential for African multilateral banks to gain prominence amid these shifting aid dynamics.
Gamble also pointed to a U.S. pivot towards strategic mineral investments in Africa, potentially creating a new arena for trade tensions with China.
He suggested Africa could become a key battleground in U.S.-China rivalry, with the U.S. increasingly focused on mineral access over broad development aid, exemplified by interest in the Democratic Republic of Congo’s mineral wealth
