S&P Upgrades Ivory Coast Credit Rating on Higher Cocoa Prices
TLDR
- Ivory Coast receives credit rating upgrade from S&P Global Ratings to BB with stable outlook, nearing investment-grade status
- Upgrade attributed to strong economic growth, shrinking budget deficits driven by higher cocoa prices, rising exports in hydrocarbons and mining
- S&P predicts Ivory Coast's budget deficit to hit 3% of GDP in 2024, with a narrowing external deficit, fueled by anticipated higher cocoa harvest in 2024-2025
Ivory Coast has received a credit rating upgrade from S&P Global Ratings, which raised the country’s rating from BB- to BB with a stable outlook, bringing it a step closer to investment-grade status.
The upgrade reflects strong economic growth and shrinking budget deficits, driven by higher cocoa prices and rising exports in hydrocarbons and mining.
S&P expects the West African nation's budget deficit to reach 3% of GDP in 2024, coupled with a narrowing external deficit, drove the upgrade. The 2024-2025 cocoa harvest is forecasted to be up to 10% higher than earlier estimates, contributing to the country’s improved economic outlook.
Key Takeaways
With the upgrade, Ivory Coast, the world’s largest cocoa producer, is now rated on par with nations like the Dominican Republic and Brazil, with a stable outlook. Its dollar bonds maturing in 2033 traded around 91.8 cents on the dollar following the rating boost, indicating steady investor confidence in the nation’s financial future. Domestically, Côte d'Ivoire has multiplied structural reforms, aimed at diversifying an economy that has long been dependent on raw materials. These reforms, coupled with better mobilization of tax revenues, have strengthened the country's economic fundamentals. This dynamic is supported by promising prospects, with real GDP growth expected at 6.6% between 2024 and 2027.
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