Fitch downgrades Gabon

Fitch Ratings said it downgraded Gabon's long-term foreign and local currency issuer default ratings, and the issue ratings on its senior unsecured foreign currency bonds, to B+ from BB-.

The outlook is stable.

Gabon's short-term issuer default rating was affirmed at B. The agency also affirmed the country ceiling for the Communaute Economique et Monetaire d'Afrique Centrale and for Gabon at BBB-.

Declines in Gabon's oil production increase the sovereign's and broader economy's sensitivity to oil price shocks, Fitch said. Because its onshore oil fields are maturing, and offshore exploration is at an early stage, Gabon cannot rely on its production to offset the impact of price shocks.

Lower oil prices and an uncertain regulatory and fiscal environment will weigh on the ongoing exploration in deep-sea, and therefore on medium-term, oil prospects. Diversification of the economy away from oil is slow, and is likely to be negatively impacted by the scaling-down of the public investment program, according to the agency.

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