Fitch Upgrades Congo’s Local-Currency Debt Rating To CCC+

August 17, 2026
By Mintesinot Nigussie

Fitch Ratings has upgraded Congo’s long-term local-currency issuer default rating to CCC+ from CCC, citing improved regional financing conditions and a smoother domestic debt repayment profile that have reduced refinancing risks.

The ratings agency affirmed Congo’s long-term foreign-currency issuer default rating at CCC+. Fitch does not typically assign outlooks to sovereigns rated CCC+ or below.

The upgrade reflects a reduction in domestic debt repayment pressures. Fitch estimates domestic debt repayments will fall to nine percent of GDP in 2026, from 13 percent in 2024 and 14 percent in 2025.

Improved liquidity in the regional debt market, supported by higher oil prices and a stronger regional macroeconomic backdrop, has allowed Congo to extend the maturities of local-currency debt issuance. The country has also relied more heavily on external borrowing through Eurobond issuance.

Fitch said the changes have reduced the risk of a refinancing failure similar to the 2024 domestic debt exchange, which the agency classified as a distressed debt exchange.

Congo’s arrears are also expected to decline. Fitch forecasts external and domestic arrears will fall to 9.4 percent of GDP in 2026 from an estimated 13.3 percent in 2025, supported by a projected fiscal surplus and additional borrowing from financial markets.

The agency said public financial management remains a key weakness in Congo’s credit profile, citing recurrent arrears, including obligations to external official creditors and domestic suppliers. Reforms currently under way could reduce the risk of further arrears accumulation if implemented effectively.

Higher oil prices and production are expected to generate a fiscal surplus equivalent to two percent of GDP in 2026 and accelerate the reduction in government debt. Fitch forecasts government debt will fall to 80.9 percent of GDP in 2026 from 92.1 percent at the end of 2025.

Despite the decline, the debt ratio is expected to remain above the 67.1 percent median for sovereigns rated between B and D. Fitch expects the pace of debt reduction to slow in 2027 as oil prices ease.

The oil sector remains central to Congo’s fiscal and external position. Fitch forecasts real GDP growth will accelerate to 4.3 percent in 2026 from an estimated 2.7 percent in 2025, driven mainly by higher oil production.

Oil output is expected to increase to 293,000 barrels a day in 2026 from 271,000 barrels a day in 2025 following the opening of new wells. Stronger gas production from the second phase of the ENI Congo LNG project, fewer power cuts and a recovery in public investment are also expected to support growth.

Fitch expects the current account deficit to narrow to 0.1 percent of GDP in 2026 before widening in 2027 as oil prices decline. Regional CEMAC reserves are forecast to reach about 14 billion US dollars by the end of 2026, equivalent to 4.7 months of import cover, although Fitch expects the improvement to be temporary.

Congo requested a new IMF programme in April 2026. Fitch expects an agreement by the end of the year, with disbursements beginning in 2027, although the process depends partly on policy assurances from other CEMAC members.

The agency said Congo’s rating remains constrained by weak public financial management, high debt, heavy dependence on oil and low governance scores. Congo ranks at the 16th percentile on the World Bank Governance Indicators.

Fitch could downgrade the rating if financing pressures intensify, oil revenues fall sharply below its baseline expectations, arrears worsen or official-sector financing is suspended. A sharp increase in the debt-to-GDP ratio could also trigger negative rating action.

An upgrade could follow sustained improvements in public financial management, stronger CEMAC reserves or a sharp reduction in public debt accompanied by stronger economic growth.

Source: FSX Business News