Really Bad News: Mozambique Insurance broker Aon raises country sovereign risk

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Mozambique was the only country in sub-Saharan Africa to see its Political Risk, Default Risk and External Transfers increase to High, according to an analysis by risk insurance brokerage firm Aon (https://www. riskmaps.aon.co.uk/).

Analysts from the brokerage, which every year draws up a map of the political risk of almost all countries, wrote that due to deterioration of the general credit rating in the last quarter of 2016 Mozambique rose from a rating of “Medium-High” to ” High.”

In the quarterly update, analysts said “Mozambique is going through a debt crisis, exacerbated by the discovery of government fraud and the subsequent suspension of financing and international support, including from the International Monetary Fund (IMF) aid programme.”

Recalling the debts of public companies that were hidden from the country’s official, the AON analysts anticipate difficulties in the short and medium term, not only in payment of debts but also in the business environment in Mozambique.

“The ongoing international audit should reveal that current debt levels are unsustainable, which means that more debt restructuring will be necessary,” the report said, adding “this could undermine the business environment for international entrepreneurs.”

The Political Risk map, whose latest quarterly update has now been published, examines nearly 160 countries and territories through 168 indicators.

Source: macauhub

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