THE credit rating agency Fitch Ratings has downgraded Namibia’s creditworthiness again, this time stating that the deterioration in economic growth and the government’s budget situation would not be over soon in the absence of a return to an economic recovery.
Fitch’s latest country credit rating on Namibia was released today.
The credit agency again lowered the country’s credit rating, to a notch below the previous rating, indicating that the downgrade was a reflection of the domestic economy, which is under recessionary pressure.
Despite hope for a stable outlook, the agency reduced Namibia’s growth potential as the macroeconomic environment has worsened.
The agency attributed its decision to lower the country’s creditworthiness rating to limping economic activities, a risk of rising external shocks from the prevailing drought, and an increasing potential liability burden from certain public entities.
Fitch stated it would be a battle for the government to stabilise economic prospects, given elevated inequality and a high unemployment rate, as it tries to lower spending.
The agency also said recent policy initiatives aiming at spurring investment, including an investment summit held in August, would have only a muted impact on economic activity amid persistent structural bottlenecks.