Ivory Coast is the Top-Rated Sovereign in Sub-Saharan Africa – REPORT

Ivory Coast, the world’s leading cocoa producer, has eclipsed South Africa as the highest-rated state in Sub-Saharan Africa with foreign debt outstanding. S&P Global Ratings confirmed both countries at BB-, with Ivory Coast’s outlook elevated to positive due to improving debt profile and South Africa’s outlook remaining stable.

According to the index, the yield on Ivory Coast’s 2028 debt plummeted 13 basis points to 7.09% on Monday, its lowest level since April 15. South Africa’s dollar debt due in 2030 traded at a yield of 6.9%, down from more than 8.5% in October.

“The rating trajectory of Côte d’Ivoire over the past ten years has been impressive,” said Samir Gadio, head of Africa strategy at Standard Chartered. “Many other African sovereigns have been downgraded over that period.”

In January, Ivory Coast sold $2.6 billion in eurobonds, ending Sub-Saharan Africa’s nearly two-year isolation from international capital markets. The economy, one of the region’s fastest-growing, is expected to rise by 6.5% in 2024, up from 6.2% last year.

Despite a fall in cocoa production, the government reached a $4.8 billion financial accord with the IMF. S&P anticipates commodities exports to increase during the next two years.

“The positive outlook reflects our view that rising commodity exports could significantly reduce external and fiscal imbalances,” said S&P’s primary credit analyst, Sebastien Boreux. Reforms, donor support, and stability contribute to significant economic growth.

In March, Moody’s upgraded Ivory Coast’s rating to Ba2, two rung below investment grade and on par with South Africa. Gadio stated that, while both countries’ ratings are identical, Ivory Coast’s bonds are expected to continue trading at a premium.

“Côte d’Ivoire has built a strong track record in global financial markets,” Gadio said, adding that more budget consolidation is required to stabilize debt levels.

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