Mozambique sovereign debt rating dropped

Poor old Mozambique is also struggling to keep its financial nose clean for rating agency Standard & Poor’s.

It has lowered its credit rating on Mozambique for the second time this year - in February from “B +” to “B”, and now from “B” to “B-”.

This latest drop is a result of a shaky, state-endorsed loan to Mozambican tuna company Ematum. A company sitting with a R10.625 billion loan (R6.25bn guaranteed by the state) while in a state of imminent bankruptcy, according to the credit agency report.

According to S & P, this is a nationwide problem – and casts doubt on Mozambique’s “governance model and government management of public sector debt”.

The agency has also put Mozambique on credit watch, which is usually a sign of further downgrades.