S&P affirms Cameroon rtgs at 'B/B';outlook stable | CameroonOnline ...

The following statement was released by the rating agency:

The ratings on Cameroon continue to be constrained by infrastructure gaps?

The ratings on Cameroon continue to be constrained by infrastructure gaps, low development, weak GDP per capita growth, vulnerability to external shocks, financial sector weakness, and high political risk stemming from uncertainty over presidential succession.

However, we believe government debt levels remain moderate and that Cameroon?s membership of the CEMAC zone limits macroeconomic risks.

We are therefore affirming our ?B/B? long- and short-term sovereign credit ratings on Cameroon.

The stable outlook balances risks related to the presidential succession, the fiscal impact of subsidies, the weak financial sector, and vulnerability to external shocks, against our expectation that the government will make some efforts toward structural reform, that donor support will remain strong, that political stability will be maintained, and that economic growth will accelerate.

Rating Action

On Nov. 5, 2012, Standard & Poor?s Ratings Services affirmed its ?B/B? long- and short-term sovereign credit ratings on the Republic of Cameroon. The outlook is stable. The transfer and convertibility (T&C) assessment is ?BBB-?.

Rationale

The ratings on Cameroon continue to be constrained by infrastructure gaps, low development, weak (albeit gently accelerating) GDP per capita growth, vulnerability to external shocks, financial sector weakness, and high political risk stemming from uncertainty over presidential succession.

The ratings are supported by the mitigation of macroeconomic risks, particularly in relation to exchange-rates and inflation, which comes with CEMAC (Economic Community of Central African States) membership, and moderate government debt levels since relief was granted under the highly indebted poor country program (HIPC) and multilateral debt relief initiative (MDRI) in 2006.

However, we expect wider general government deficits to increase the debt stock.

Source: http://www.cameroononline.org/2012/11/06/soutlook-stable/

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