Congo-Brazzaville affirmed at ’CCC+/C’ by S&P, outlook stable

Investing.com -- S&P Global Ratings has affirmed Congo-Brazzaville’s ’CCC+/C’ long- and short-term foreign and local currency sovereign credit ratings with a stable outlook on Friday.

The rating agency cited the country’s ability to generate fiscal surpluses against its tight amortization schedule and limited funding availability as key factors in the decision.

Despite expected improvements in Congo-Brazzaville’s fiscal position through tax reforms, the government faces significant liquidity challenges that could affect its debt repayment capacity. Debt service is projected to reach 13% of GDP in 2025, with short-term bills accounting for 8% of GDP.

The country has been working to improve its debt management practices through increased transparency and the creation of a unified database for debt operations. However, S&P noted that Congo-Brazzaville continues to accumulate arrears to noncommercial creditors and engaged in what S&P considered a distressed debt exchange in October 2024 on its regional market debt.

Economic growth is expected to remain subdued at 3.2% annually from 2025-2028, as oil production stalls at around 270,000 barrels per day. Technical difficulties, maintenance delays, and insufficient investment have prevented production increases despite announcements of significant investments by major oil companies like Total (EPA:TTEF) and Perenco.

The non-oil sector is projected to grow at 4% annually, driven by services and agriculture. The government’s commitment to repay past arrears to domestic providers and social security is expected to support economic confidence.

Congo-Brazzaville completed its $455 million IMF extended credit facility in March 2025, marking the first fully implemented IMF program by the country, though it required waivers for some unmet performance criteria.

The government is forecast to maintain fiscal surpluses through 2028, though these will narrow from 5.3% of GDP in 2024 to 0.3% in 2028 as oil prices decline from $80 per barrel in 2024 to $65 in 2026-2028.

Net government debt is expected to decrease from 93% of GDP in 2024 to 73% by 2028, still above the Economic and Monetary Community of Central Africa’s target of 70%.

S&P indicated it could lower the ratings if liquidity pressures severely impair the government’s ability to service commercial debt or if these obligations are included in a debt restructuring. Conversely, ratings could be raised if liquidity pressures ease due to increased funding availability or an improved debt profile, along with better debt management and transparency practices.

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