Things will be torrid for Zambia in 2016 – International agency

Zambia is in for a “torrid time” in 2016, ratings agency Fitch warned on Thursday, whilst a delay in decisive fiscal consolidation in Kenya could ultimately result in a cut to its already junk rating.

Torrid means ‘hot and dry’ or full of difficulties’.

“Zambia is in for a torrid time next year,” said Carmen Altenkirch, a sovereigns analyst, adding she thought Zambia would be forced to return to the Eurobond markets next year, which the country would find “challenging”.

In August, Fitch affirmed Zambia at ‘B’ with a stable outlook. Zambia has tapped international bond markets three times since 2012, most recently with an 11-year, $1.25 billion bond issued in July 2015, taking the total value of outstanding Eurobonds to $3 billion.

On Kenya, Altenkirch said that over the medium term, fiscal and external risks were rising, particularly if there was no decisive fiscal consolidation by its government.

“The longer they delay this, it clearly places additional pressure on debt and could ultimately result in the rating being downgraded,” she said.

In July, Fitch affirmed Kenya’s rating at B+, but cut its outlook to negative from stable.

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