Sub-Saharan Africa is likely to retain its status as the world’s second-fastest-growing region after emerging Asia, Moody’s Investors Service says. The ratings agency expects the region to post economic growth between 4.5% and 4.75% this year, despite the drag caused by low commodity prices.
Although this would be a second consecutive year of deceleration for the region, its growth nonetheless remains significantly above the global average of about 3%, the ratings firm said in a report released on Tuesday.
“Sub-Saharan African economies’ heavy dependence on commodities means that nearly every country in the region is deeply affected by commodity price cycles,” Moody’s said.
Nevertheless, the firm maintains a stable outlook for 13 of the region’s 17 sovereign ratings.
The firm has a positive outlook on Ivory Coast, due to rapid growth in average per capita income, and on Senegal, due to the country’s political stability. Both are currently rated B1, with upgrades likely over the next 12-18 months, the ratings firm said.
But Moody’s also has negative outlooks on Angola (Ba2) and Ghana (B3), where weak commodity prices are having a particularly strong impact. Angola is a heavily oil-dependent economy with about 97% of its export revenue coming from crude, according to the U.S. Energy Information Administration.
Meanwhile, Ghana’s currency has plunged amid falling prices for its gold, cocoa and crude exports. Moody’s said an energy deficit in the country contributed to its negative outlook.