Tag: Fitch ratings

Growth in Angola and Nigeria slow on weaker crude

Growth in Angola and Nigeria, the only sub- Saharan African members of Opec, would slow next year because of weaker crude prices, according to Fitch Ratings.

Fitch’s 2015 growth projection for Nigeria was revised down to 5.2 percent from 6.4 percent, Carmen Altenkirch and Richard Fox, sovereign analysts at the ratings company, said in a statement yesterday. Nigeria, along with Angola and Gabon, would also suffer from worsening current account and fiscal balances, they said.

Policymakers in Nigeria have proposed spending cuts and devalued the naira last month amid declining foreign reserves. “Most sub-Saharan African countries are significant oil importers,” they said. “Oil makes up around 20 percent of the import bill in Kenya, Cote d’Ivoire, Seychelles and Ethiopia.”

The rand firmed against the US dollar on Monday, recouping some recent losses after ratings agency Fitch surprised markets by not downgrading its credit view on Africa’s most developed economy.

Fitch said growing current account and budget deficits were restricting growth in South Africa’s economy but maintained its BBB rating, while Standard & Poor’s kept its rating at BBB-, one notch above junk status.

Analysts said this would provide only brief respite as they predicted South Africa’s credit status would be cut in the next six months.

Source: Bloomberg

Spain moves to block Catalonia independence

Spain’s Constitutional Court on Monday suspended an independence referendum called by Catalonia for November 9, although leaders of the rich northeastern region vowed to press ahead anyway with preparations for the vote.

The unanimous and expected decision by the court’s 12 judges came just hours after Spain’s central government asked it to declare the independence referendum illegal on the grounds that it breaches the country’s constitution.

The court said in a statement that it had accepted the appeal and had suspended the referendum while it considers the central government’s arguments. The court had up to five months to give its ruling although it can request an extension.

The head of the regional government of Catalonia, Artur Mas, signed a decree on Saturday calling for the referendum.

Since then a luminous clock on Barcelona’s historic Sant Jaume square has been ticking down the seconds to November 9 and television and radio stations in the region have aired ads informing the public of the vote.

Conservative Prime Minister Mariano Rajoy said he “deeply” regretted Mas’s move, saying it “divides Catalans, alienates them from Europe and the rest of Spain and seriously harms their welfare”.

Buoyed by mass street demonstrations, Mas has pushed ahead for a vote in defiance of Rajoy’s warnings.

“You cannot use the law to prevent people indefinitely from stating their opinion,” Mas said in a television interview on Sunday in anticipation of Monday’s appeal.

“Voting on November is the best thing for everyone because it will allow us and also the Spanish government to know what the Catalan people’s opinion is.”

The main opposition Socialist Party is calling for a constitutional reform instead of a vote to answer Catalan demands for greater autonomy.

The Socialists’ leader Pedro Sanchez on Monday said the referendum plan “deeply damages Spanish democracy”.

Fitch Ratings has chimed in also by placing the Autonomous Community of Catalonia’s (Catalonia) and Institut Catala de Finances’ (ICF) Long-term foreign and local currency Issuer Default Ratings (IDR) of ‘BBB-‘ on Rating Watch Negative (RWN).

Their Short-term foreign currency IDRs of ‘F3’ have also been placed on RWN. Catalonia’s EMTN programme and bond issues, rated ‘BBB-‘, were also placed on RWN.

The last scheduled review date for Fitch’s ratings of the Autonomous Community of Catalonia was on 25 July 2014 and the next review date for 2015 has not yet been set.