Financial rating agency Moody’s announced on October 13, 2020 that it had lowered Rwanda’s outlook from “stable” to “negative”, and confirmed the long-term rating of the issuer to “B2”.
For the agency, this “negative rating” is justified by the risks generated by the coronavirus pandemic. The Covid-19 is indeed likely to have a lasting effect on certain sectors of the country’s economy, particularly transport and tourism, which will potentially reduce the return on previous public investments.
Lower growth, Moody’s points out, would in turn make fiscal consolidation more difficult, increasing the credit risks associated with Rwanda’s relatively high debt burden.
For its part, the “B2” rating is supported by limited financing risks despite the increase in investment needs. According to the agency, external financing provided by multilateral institutions and other development partners will help meet the government’s larger financing needs and limit the immediate liquidity pressure.