Fitch Ratings keeps Mozambique’s rating at “B +” with a stable outlook

4 May 2015

Fitch Ratings kept its rating on Mozambique’s long-term debt in foreign and national currency at “B+” with a stable outlook, according to a statement released by the agency.

In the statement Fitch said economic growth was expected to fall this year to 6.8 percent, after an average of 7.2 percent recorded in the last five years, but higher than the median of 4.4 percent given to the “B” rating.

The cooling of the economy will continue to be due to the adverse impact of floods in early January on agricultural production and infrastructure.

Fitch said the prospect of developments in the economy in the medium-term remained favourable, despite the risks associated with the drop in the price of raw materials and the constraints in terms of infrastructure, with the development of the coal sector suffering from high transport costs and low prices in international markets.

“The development of projects related to the exploration of natural gas deposits is expected to continue, and it is estimated it will cost US$40 billion,” the statement said.

However, given the current price of oil per barrel along with the possibility of US group Anadarko Petroleum selling its stake in the Area 1 block to Exxon Mobil, a final investment decision may not come before 2016, which would mean natural gas exploration would be pushed back to 2020 or even later. (macauhub/MZ)