Moody’s has maintained its credit rating for Botswana, citing the nation’s strong fiscal position and expectations of growth for the diamond sector.
The ratings agency reaffirmed the country’s “A2” rating for long- and short-term bonds, and kept its outlook for its economy at “stable,” the Bank of Botswana said in a statement last week.
Moody’s based its decision on Botswana’s low debt levels, large sovereign wealth fund, strong economic infrastructure and stable political environment, the bank explained. The agency premised its outlook for the economy on an assumption that the country will continue to show fiscal prudence, the bank added.
“Expected growth in diamond output, progress in enhancing diamond-value addition and development of the services sector also contribute to the rating,” the statement continued.
“There is a possibility of a medium-term upward revision of the ratings if progress is made in diamond beneficiation, economic diversification and the implementation of efficiency-enhancing public sector reforms, as well as private-sector development leading to a marked reduction in unemployment,” it added.