Ivory Coast’s GDP growth has been high ever since the country was granted debt relief in 2012, with growth forecast to come in at around seven per cent per year. Along with a more stable political situation, the country's positive economic performance justifies upgrading the country risk category.
“The debt relief validated the government’s policies following the 2010/2011 crisis and this opened up new economic opportunities for the country,” says Johan Dahl, country risk analyst at EKN.
The country is a member of the West African Economic and Monetary Union. The union’s currency, the CFA franc, is pegged to the euro, which reduces the risk of transfer problems.
EKN's outstanding guarantee exposure for exports to Ivory Coast totals SEK 42 million.
Factors that led to the downgrade include a weaker growth outlook, increased debt and a high risk that the 2016 forecasts will not be met.
“Ghana's external debt has risen considerably since the 2004 debt relief. In spite of a new IMF agreement in spring, Ghana faces a high risk of being unable to slow down the increase of the national debt and the current account deficit,” says Johan Dahl.
The budget deficit is at risk of further increasing in conjunction with next year's elections, given that the elections have often led to major unfinanced spending increases historically. The return on oil investments will not be seen for a while due to the current low oil prices.
“Lower confidence in Ghana as a country to invest in has weakened its currency. There is also concern that rising US interest rates could lower capital inflows,” says Johan Dahl.
EKN's outstanding guarantee exposure for exports to Ghana totals SEK 581 million.