Fitch upgrades Mozambique

Fitch Ratings said it upgraded Mozambique's long-term foreign-currency issuer default rating to CCC+ from CCC. The agency typically does not assign outlooks to sovereigns with a CCC+ rating or below and removed the long-term IDRs from under criteria observation.

“Mozambique's financing constraints have eased substantially with the agreement of a three-year $456 million Extended Credit Facility with the IMF, with $91 million to be disbursed in 2022. Fitch expects this program to unlock additional concessional funding from multilateral partners, including the World Bank, after years of restricted access to external funding sources following the ‘hidden debts’ scandal of 2016,” Fitch said in a press release.

“This easing of Mozambique's external funding constraints coincides with an increase in the country's external debt servicing costs in 2022 and onwards, after the expiration of the Debt Service Suspension Initiative (DSSI) in December 2021,” the agency said.

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