Moody’s has revised Gabon’s outlook to negative from stable, warning that rising financing pressures, limited access to funding and possible increases in public debt could raise the risk of further debt exchanges.
The ratings agency said such exchanges could be considered distressed and therefore amount to a default. It affirmed Gabon’s sovereign rating at Caa2.
The warning comes as the Central African oil producer prepares a broad audit of past borrowing while seeking fresh financing for basic infrastructure after years of concerns over debt management and fiscal slippages.
Moody’s said the audit could expose previously unreported liabilities, further weakening Gabon’s debt sustainability.
In April, Gabon’s finance ministry signed a $150 million agreement with the World Bank aimed at strengthening public finances, bringing the institution’s total commitment to the country to $600 million.
Moody’s said a future IMF programme could improve Gabon’s access to financing over time, but warned that near-term funding constraints remain severe. It said current market conditions suggest any international debt issuance would come at a higher cost.
“We expect fiscal deficits to remain high over the medium term,” Moody’s said.
The downgrade in outlook adds pressure on Gabon’s authorities as they try to restore confidence in public finances while maintaining spending on infrastructure and basic services.