26 Apr 2016

The Sovereign Credit Rating Agency, Moody’s Investors Service (Moody’s), has reviewed and reaffirmed that for 2016, Botswana’s credit rating of A2 for foreign and domestic bond has been upheld.

A press release from Bank of Botswana states that this follows the review that took account of the commodity price shock and impact on the country’s economic and fiscal strength. 

Moody’s noted that the current economic and fiscal challenges emanating from the external environment are appropriately captured by the A2 rating, states the release.

The release also states that the rating is underpinned by Botswana’s continued fiscal resilience, which is supported by the current level of foreign exchange reserves, relatively low public debt and a track record of prudent rule-based fiscal policy as well as a strong institutional framework. 

Moody’s also observes that given the healthy financial position and the stable political environment, the risks that could put renewed pressure on the ratings are judged to be low. 

It states that these factors would ensure restoration of buffers and sustained economic growth in the aftermath of the current challenges. At the same time, the rating remains constrained by the relatively slow pace of economic diversification and high dependence of the country on the diamond industry for growth, revenue and export proceeds. ENDS