Fitch Pushes Gabon Rating Deeper Into Junk on Rising Debt and Tight Liquidity
Quidah is an online platform that connects investors with curated opportunities and expert insights on Africa’s emerging markets, while offering businesses promotional services, partnership facilitation, and market intelligence to attract capital and grow their operations.
Industries
Fitch Ratings has downgraded Gabon’s long-term foreign-currency issuer default rating to “CCC-” from “CCC,” citing rising fiscal deficits, surging debt, and tightening liquidity that have strained the country’s financing capacity. The downgrade, announced on Friday, underscores growing concerns about the Central African nation’s ability to manage its borrowing needs as access to regional markets narrows.
The ratings agency said a sharp weakening in demand for government debt during the second half of the year had compounded Gabon’s financing challenges. Fitch noted that the government’s local-currency funding requirements had increased significantly while liquidity conditions in the domestic market had become more constrained. It added that the gap between Gabon’s local- and foreign-currency ratings reflected the higher stress in local funding channels.
Fitch expects Gabon’s government debt to reach 80.4% of gross domestic product in 2025, driven by an expansionary fiscal stance. The agency also lowered the country’s long-term local-currency issuer rating to “CC” from “CCC,” highlighting growing risks from limited investor demand and higher refinancing pressures. It said the fiscal position has been further weakened by a steady decline in oil production and ambitious public investment projects that continue to weigh on the national budget.
The downgrade comes amid earlier warnings from the World Bank that Gabon’s fiscal outlook remains fragile despite recent political changes and a renewed push for structural reforms. The lender said sustained efforts to strengthen economic governance and contain public spending will be essential to preserve financial stability and support inclusive growth.
Fitch’s latest action deepens Gabon’s position in non-investment grade territory, signaling potential financing headwinds for the government as it seeks to roll over maturing debt and maintain essential capital spending. The heightened risk profile could also deter investor participation in local and regional bond markets, limiting future borrowing options for the sovereign.
