RTTNews - Thursday, Fitch Ratings affirmed Cameroon's long-term foreign currency Issuer Default Rating at 'B' and the long-term local currency IDR at 'B minus', with stable outlooks. The firm also confirmed the short-term foreign currency IDR at 'B' and the country ceiling at ' BBB minus'.
Fitch said Cameroon's long-term foreign currency IDR was constrained by weak economic fundamentals, significant governance issues and political risks associated with the succession of the current administration.
The country's low investment rate and insufficient absorption capacity are mostly attributable to weak public governance. The government's efforts to fight corruption have not yet been effective, and the poor business climate is one of the main causes of sluggish bank lending and slow growth, Eric Paget-Blanc, Senior Director at Fitch's Sovereigns team said. Moreover, the country also faced significant infrastructure constraints, especially power shortages.
However, poverty in the country was lower than in most countries that were eligible for debt relief. Cameroon's per capita GDP stood at US$1,226, which compares favorably well peers in the sub-Sahara Africa region, Fitch said.
The firm forecast's Cameroon's GDP growth to slow to 2.5% this year, after the country averaged a growth rate of 3.4% in the years between 2003 and 2008.
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