Announcements Research

GCR publishes the Country Risk Score for Gabon and Senegal

Johannesburg, 17 February 2021: GCR Ratings (“GCR”) has published the Country Risk Score for Gabon and Senegal. The Country Risk Scores are available for download at https://gcrratings.com/risk-scores/.

The GCR Country Risk Assessment

The Country Risk assessment, which is a key part of the operating environment score, interacts with GCR ratings in four ways. Firstly, the country risk scores create the foundation for the Anchor Credit Evaluator (the mapping table, see the Criteria for the GCR Ratings Framework and the interactive online map at https://GCRratings.com/criteria). Secondly, the country risk score/assessment acts as an anchor to the GCR Risk Score and therefore ultimately to the GCR issuer ratings. Thirdly, the country risk assessment acts as a hurdle (or more accurately as a series of hurdles, differing according to industry) that limits uplift away from an entity’s financial sector operating environment (the combination of the country risk score and the financial sector risk score). Fourthly, the country risk score provides a level from which government support can be applied for each industry. For more details on the above, please read the related criteria and research listed below.

GCR will periodically publish updated “Country Risk Scores”, which will supersede previous publications. The publication titled “GCR Country Risk Scores, 17 February 2021”, available at https://gcrratings.com/risk-scores/, supersedes the article published on 09 February 2021.

Country Risk Score

Gabonese Republic, Country Risk Score 1.50. Mapping Table 1.0 to 2.0.

GCR assigned a ‘3’ score for the GDP per capita. Low wealth levels, a sparce population distribution and increased social and economic vulnerability is evident, albeit an upper-middle-income country. Strong economic growth has traditionally been driven by its production of oil and manganese, however, this is partly offset by lower oil and manganese prices and the demand for oil. The government is undergoing several payroll optimisation attempts by means of auditing the payroll to identify ghost workers and a moratorium of new appointments is currently in place. Government debt is elevated and fiscal risks remain very high in the short-term. The Institutional Score of ‘1.25’ measure ‘-0.74’ of the average World Bank Governance Indicators and a ‘47’ overall score (119th) on the World Economic Forum Global Competitiveness Index globally. GCR assigned a blended negative ‘2.5’ adjustment considering the Commodity/Industry concentration, Fiscal and External positions are viewed negatively.

Republic of Senegal, Country Risk Score 3.75. Mapping Table 3.5 to 4.0.

GCR noted the GDP per capita of USD1,440 which qualifies for a ‘2’ score. A peaceful pollical environment helps the regional stability on the back of neighbouring countries security concerns. Robust historic economic growth is expected to continue from 2021 onwards albeit a slight negative in 2020. Economic activities are geared towards agriculture and future development of oil and gas would further diversify the economy – tourism and transport sectors will continue to be impacted by the pandemic. The Institutional Score of ‘2.25’ measure ‘-0.08’ of the average World Bank Governance Indicators and a ‘50’ overall score (114th) on the World Economic Forum Global Competitiveness Index globally. GCR assigned a negative ‘0.5’ adjustment considering the currently restrained fiscal position.

Analytical contacts

Primary Analyst Corné Els Senior Financial Institutions Analyst
Johannesburg, South Africa CorneE@GCRratings.com +27 11 784 1771
Primary Analyst Matthew Pirnie Group Head of Ratings
Johannesburg, South Africa MatthewP@GCRratings.com +27 11 784 1771

Related criteria and research

Criteria for the GCR Ratings Framework, May 2019
GCR Country Risk Scores, February 2021
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