Gabon and Niger Under Moody’s Review After Recent Coups

Gabon and Niger Under Moody’s Review After Recent Coups

Moody’s, a credit rating agency, is considering the economic repercussions of the recent military coup in Gabon before making any decisive moves regarding the country’s credit rating. Currently, Gabon maintains a Caa1 rating with a “stable” outlook. Mickaël Gondrand, who oversees Gabon’s assessment at Moody’s, stated that the evolving circumstances surrounding the coup are “credit negative.” The agency continues to monitor developments carefully, per Reuters.

Uncertainties Around Economic Sanctions

Gondrand also noted that a key area of uncertainty at this point is whether Gabon will face economic or financial sanctions. Several international bodies, including France, the United States, and the African Union, have publicly condemned the coup, with the African Union suspending Gabon’s membership. Any potential sanctions could have a significant impact on Gabon’s economy, particularly concerning trade and investment flows. According to World Bank data, Gabon has enjoyed strong net foreign direct investment inflows in the last five years, averaging around 9% of its GDP between 2016 and 2021.

Niger Under Review for Another Downgrade

Regarding Niger, which underwent a coup in late July, Moody’s has already adjusted its credit rating, lowering it by two full grades. Elisa Parisi Capone, another analyst at Moody’s, stated that Niger is currently under review for a potential additional downgrade. Usually, Moody’s aims to complete these reviews within a 90-day window, although exceptions can occur.

Gondrand also mentioned that the coup in Gabon might have repercussions for the support the country receives from the international community. This could further affect Gabon’s relationship with the International Monetary Fund (IMF). The IMF program, which has already seen delays, could experience further setbacks due to the ongoing instability.

Financially, Gabon may not be under immediate pressure as its next major bond payment is due in 2025, amounting to approximately $605 million. Nonetheless, the agency maintains a cautious outlook on both nations, acknowledging the fluid nature of political events and their impact on economic stability.