Congo-Brazzaville

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Congo-Brazzaville's economic growth will gain traction but remain tepid compared with regional peers. Congo-Brazzaville's fiscal position will benefit from slightly improved oil revenues, but it faces a steep amortization schedule. -- Oil production should provide a boost to economic activity as it bounces back from recent low points. -- We expect budget surpluses thanks to stronger oil revenue, but surpluses will be insufficient to cover debt repayment. -- The non-oil sector will benefit from easing liquidity conditions due to the government's payment of arrears and will support growth in the medium term. -- The country should benefit from the support of external creditors

... weak, but the country is committed to limiting arrears accumulation. In 2023, Congo-Brazzaville accumulated external arrears of about $26 million. The arrears were on noncommercial debt to government lenders, therefore S&P Global Ratings does not consider them a default under its criteria. Congo-Brazzaville is aiming to strengthen its debt management oversight to ensure the availability of funds before each debt maturity or interest payment. This should limit the risk of new arrears accumulation. That said, the country has only one Eurobond outstanding. It matures in 2029 and is fully amortized (annual amortization represents 0.2% of GDP). We note Congo-Brazzaville continued to service the Eurobond even at times of acute liquidity constraints in 2020-2021. The economic recovery should continue, but risks remain elevated. The recovery after the recession continues to be slow since oil-sector growth is dampened by persisting production...

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