Moody's ups Democratic Republic of Congo

Moody's Investors Service said it upgraded the long-term local- and foreign-currency issuer ratings of the government of Democratic Republic of the Congo to B3 from Caa1 and changed the outlook to stable from positive.

“The decision to upgrade the issuer ratings to B3 recognizes the country's strengthening economic and fiscal prospects fostered by institutional improvements supported by the IMF program that started in July 2021. The country's external position also continues to strengthen, evidenced by the accumulation of official foreign-exchange reserves.

“Recent improvements notwithstanding, the DRC's creditworthiness remains constrained by its very low GDP per capita, low competitiveness, still-weak institutions and deteriorating political risk environment, as well as its very limited domestic financing capacity and reliance on external concessional funding,” Moody’s said in a press release.

The stable outlook reflects the view that the credit risks are balanced at B3 between the possibility for more positive developments on the DRC's credit fundamentals, and the still-high vulnerability to commodity price shocks that can translate into severe episodes of macroeconomic volatility, the agency said.

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