Fitch confirms Republic of Congo's rating as CCC+ due to debt concerns

Investing.com - Fitch Ratings today confirmed the Republic of Congo’s long-term foreign currency issuer default rating and senior unsecured bond rating at CCC+, with a RR4 recovery rating, and removed the country from the watch list. The agency does not provide outlooks for sovereigns rated CCC+ or below.

This rating affirmation reflects issues such as weak public financial management, high government debt, heavy reliance on oil, low governance scores, and limited access to regional markets, which have led to poor debt repayment records and recurring arrears problems. The agency cites the October 2024 debt operation as evidence, considering it a distressed debt exchange, as well as the restructuring of external commercial debt with oil traders in 2022, both indicating weaknesses in public financial management. Fitch estimates that by the end of 2025, domestic claims on the private sector will amount to about 13% of GDP, while external claims on official creditors are estimated to total 1.6% of GDP during 2025.

Congo issued European bonds through private placements in November and December 2025, raising $930 million to repay regional debt maturing at the end of 2025 and early 2026. This issuance is expected to be refinanced through the $700 million external bonds issued in early February. Fitch believes that after the March 15, 2026, elections, the country may apply for an IMF program, with funds expected to be available in 2026 or 2027.

Economic growth is projected to accelerate from 2.1% in 2024 to 3.0% in 2025, mainly driven by a rebound in oil production. Fitch forecasts further strengthening in 2026-2027, supported by expansion in the oil and gas sectors and new liquefied natural gas production. Eni Congo is expected to start production in 2026, increasing liquefied natural gas output from 600,000 tons to 3 million tons annually by 2027.

Government debt is expected to decline to about 87% of GDP in 2025, above the median of 69.6% for B/C/D ratings, and will further decrease before 2027. Due to falling global oil prices reducing oil revenues and increased spending on security needs and election-related transfers, overall fiscal surplus is expected to narrow to about 0.5% of GDP in 2025.

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