Fitch places Gabon on ‘rating watch negative’ following coup

(Reuters) – Credit ratings agency Fitch said on Tuesday it has placed Gabon on “rating watch negative” (RWN), citing high political uncertainty in the Central African nation following a military coup last month.

In West and Central Africa’s eighth coup in three years, military officers seized power on Aug. 30, minutes after an announcement that President Ali Bongo had won an election they annulled and said was not credible.

Fitch placed Gabon’s ‘B-‘ Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings on RWN in an unscheduled review.

It said the coup may have weakened Gabon’s financial prospects by hurting the operational capacity of institutions responsible for its treasury and debt management, and also affecting the country’s access to regional debt markets.

“We assume Gabon will rely more on the regional market for financing at higher interest costs as the coup heightens the market’s nervousness,” Fitch said.

The credit ratings agency added that a resumption of the country’s IMF programme was also now unlikely.

Central African bloc ECCAS has suspended Gabon’s membership, but has so far stopped short of imposing sanctions in response to the ouster of Bongo.

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Shailesh Kuber)