Moody's slashes Niger

Moody's Investors Service said it downgraded Niger’s long-term foreign- and local-currency issuer ratings to Caa2 from B3 and placed the ratings under review for further downgrade.

“The two-notch downgrade is prompted by economic and financial sanctions imposed by the Economic Community of West African States (Ecowas) and by the West African Economic and Monetary Union (Waemu) on July 30 on the government of Niger in the wake of the military coup on July 26, 2023. If maintained, these sanctions, which include the suspension of all commercial and financial transactions between Ecowas member states and Niger as well as the freeze of assets of the Republic of Niger in Ecowas central banks and commercial banks, will likely prevent Niger from making upcoming principal or interest payments to creditors outside the country which would constitute a default under Moody's definition.

“A key driver of the downgrade is also the deterioration in Niger's institutions and governance strength reflected in the suspension of the constitutional order, with immediate repercussions on the government's access to international donor support and security cooperation which otherwise provide a key support to Niger's credit profile,” Moody’s said in a statement.

The review for further downgrade reflects the potential the situation could worsen unless an agreement between the military government and Ecowas and Waemu is reached quickly, the agency said.

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