Ethiopia rated by major credit rating agencies for first time

Three major credit rating agencies-- Moody's, Fitch and Standard and Poor's (S&P), have offered credit ratings to Ethiopia for the first time, a government minister said Wednesday. Sufian Ahmed, Ethiopian Minister of Finance and Economic Development, told reporters here that his country is satisfied with the outcome of the ratings. "The three major credit rating agencies have assigned different grades to Ethiopia, namely, B+ by Moody's, and B by Fitch and Standard and Poor's. This is the first time that Ethiopia has exercised this sovereign rating; so, the government, we are pleased with the outcome of the rating of these agencies," he said. The rating agencies have been provided with all the necessary information by the government, and they paid visits and held discussions with various organizations, embassies, private sectors in Ethiopia to look into the data, the information given to them, and came up with the results, said the minister. Sufian stated that the government decided to undertake the exercise to help investors, mainly foreign investors to have an objective assessment of the level of risk in the country. "We hope this rating exercise will give the foreign investors, mainly the foreign investors the reality on ground here in Ethiopia," he said. "The outcome of the result offers an opportunity for Ethiopia, if it decides, if the government decides, it will offer an opportunity for Ethiopia to enter international capital market." "If the government decides, the government can issue a bond. That means it could eventually also help to diversify the source of our finance, government finance to implement some of the major projects that the government is undertaking," he said. Sufian said the government has not yet decided to enter the capital market because it depends on global financial situations and the timing, for which the minister said Ethiopia is exploring it. The agencies have assessed different sectors and come out with results that are encouraging, according to the minister. The report shows that Ethiopia's economy has been really expanding very fast, said the minister. He also stated that the country's income distribution is relatively fair and that poverty has been reduced significantly over the last decade in Ethiopia, which is extremely encouraging though a lot is still to be done. "In terms of social development, I think Ethiopia is, we are on the track to achieve most of what we call the MDGs (Millennium Development Goals); be it in halving poverty, or child mortality or whatever. So, expansion of social services; expansion of infrastructure is very much encouraging according to this rating," he said.