Fitch Ratings has upgraded Egypt’s credit outlook to positive, reflecting growing confidence in the North African nation’s economic prospects following an international bailout of $57 billion.

The upgrade comes as Egypt secured a landmark bailout package to bolster its cash-strapped economy and provide much-needed relief amidst economic challenges exacerbated by geopolitical tensions and the global pandemic.

Fitch affirmed Egypt’s credit rating at B-, positioning it six notches below investment grade. However, the shift in outlook to positive shows the country’s progress in addressing external financing risks and implementing crucial economic reforms.

The positive outlook follows Egypt’s recent agreements, including a $35 billion investment deal with the United Arab Emirates as well as additional support from international financial institutions such as the International Monetary Fund and the World Bank.

According to Fitch Ratings, the reduction in near-term external financing risks can be attributed to the significant investment pledges from the UAE, coupled with Egypt’s adoption of a flexible exchange rate regime and the implementation of monetary tightening measures.

These measures have enabled Egypt to navigate its foreign exchange challenges and mitigate the impact of years of managed currency policies.

The recent jumbo interest rate hike has also facilitated the devaluation of the Egyptian pound, addressing one of the country’s most pressing economic issues.

Egypt has faced mounting economic pressures in recent years, including foreign exchange shortages exacerbated by geopolitical tensions in the region.

Challenges such as the Russia-Ukraine conflict and security threats in the Israel-Gaza region have further strained the country’s economic stability.

In response, Egyptian authorities have embarked on a series of reform efforts aimed at enhancing economic resilience and promoting private-sector growth.

These efforts include the sale of state-owned assets, curbing government spending, and reducing the influence of the military in the economy.

While Fitch Ratings’ positive outlook signals confidence in Egypt’s economic trajectory, other rating agencies have also expressed optimism.

S&P Global Ratings has assigned Egypt a B- rating with a positive outlook, while Moody’s Ratings assigns a Caa1 rating with a positive outlook.

Fitch Ratings has upgraded Nigeria’s credit outlook to positive, citing the country’s reform progress under President Bola Tinubu’s administration.

This decision is a turning point for Africa’s largest economy and signals growing confidence in its economic trajectory.

The announcement comes six months after Fitch Ratings acknowledged the swift pace of reforms initiated since President Tinubu assumed office in May of the previous year.

According to Fitch, the positive outlook reflects the government’s efforts to restore macroeconomic stability and enhance policy coherence and credibility.

Fitch Ratings affirmed Nigeria’s long-term foreign-currency issuer default rating at B-, underscoring its confidence in the country’s ability to navigate economic challenges and drive sustainable growth.

Previously, Fitch had expressed concerns about governance issues, security challenges, high inflation, and a heavy reliance on hydrocarbon revenues.

However, the ratings agency expressed optimism that President Tinubu’s market-friendly reforms would address these challenges, paving the way for increased investment and economic growth.

President Tinubu’s administration has implemented a series of policy changes aimed at reducing subsidies on fuel and electricity while allowing for a more flexible exchange rate regime.

These measures, coupled with a significant depreciation of the Naira and savings from subsidy reductions, have bolstered the government’s fiscal position and attracted investor confidence.

Fitch Ratings highlighted that these reforms have led to a reduction in distortions stemming from previous unconventional monetary and exchange rate policies.

As a result, sizable inflows have returned to Nigeria’s official foreign exchange market, providing further support for the economy.

Looking ahead, the Nigerian government aims to increase its tax-to-revenue ratio and reduce the ratio of revenue allocated to debt service.

Efforts to achieve these targets have been met with challenges, including a sharp increase in local interest rates to curb inflation and manage public debt.

Despite these challenges, Nigeria’s economic outlook appears promising, with Fitch Ratings’ positive credit outlook reflecting growing optimism among investors and stakeholders.

President Tinubu’s administration remains committed to implementing reforms that promote sustainable growth, foster investment, and enhance the country’s economic resilience.

As Nigeria continues on its path of reform and economic transformation, stakeholders are hopeful that the positive momentum signaled by Fitch Ratings will translate into tangible benefits for the country and its people.

The Seme Border, a vital trade link between Nigeria and its neighboring countries, has reported a 90% decline in trade activity due to the volatile fluctuations in the CFA franc against the Nigerian naira.

Licensed customs agents operating at the border have voiced concerns over the adverse impact of currency instability on cross-border trade.

In a conversation with the media in Lagos, Mr. Godon Ogonnanya, the Special Adviser to the President of the National Association of Government Approved Freight Forwarders, Seme Chapter, shed light on the drastic reduction in trade activities at the border post.

Ogonnanya explained the pivotal role of the CFA franc in facilitating trade transactions, saying the border’s bustling activities were closely tied to the relative strength of the CFA against the naira.

According to Ogonnanya, trade activities thrived at the Seme Border when the CFA franc was weaker compared to the naira.

However, the fluctuating nature of the CFA exchange rate has led to uncertainty and instability in trade transactions, causing a significant downturn in business operations at the border.

“The CFA rate is the reason activities are low here. In those days when the CFA was a little bit down, activities were much there but now that the rate has gone up, it is affecting the business,” Ogonnanya explained.

The unpredictability of the CFA exchange rate has added complexity to trade operations, with importers facing challenges in budgeting and planning due to sudden shifts in currency values.

Ogonnanya highlighted the cascading effects of currency fluctuations, wherein importers incur additional costs as the value of the CFA rises against the naira during the clearance process.

Despite the significant drop in trade activity, Ogonnanya expressed optimism that the situation would gradually improve at the border.

He attributed his optimism to the recent policy interventions by the Central Bank of Nigeria, which have led to the stabilization of the naira and restored confidence among traders.

In addition to currency-related challenges, customs agents cited discrepancies in clearance procedures between Cotonou Port and the Seme Border as a contributing factor to the decline in trade.

Importers face additional costs and complexities in clearing goods at both locations, discouraging trade activities and leading to a substantial decrease in business volume.

The decline in trade activity at the Seme Border underscores the urgent need for policy measures to address currency volatility and streamline trade processes.

As stakeholders navigate these challenges, there is a collective call for collaborative efforts between government agencies and industry players to revive cross-border trade and foster economic growth in the region.