In its press release dated November 22, 2021, West Africa Rating Agency (WARA) announces the publication of its rating of the African Guarantee and Economic Cooperation Fund (FAGACE). On its regional scale, WARA assigns FAGACE the long-term rating of “AA-”, in investment grade, while its short-term rating is “w-2”. The outlook attached to these ratings is “stable”.
At the same time, on its international scale, WARA also assigns FAGACE the following ratings and outlook: iBB/Stable/iw-5.
The strong points of FAGACE’s rating are: (i) good geographic and sectoral diversification, allowing the institution to benefit from the growth potential of a very large and densely populated economic area, while reducing its level of exposure to the vagaries of a single economy; (ii) sound governance, enacted by clear statutes and regulatory texts, and reinforced by the control of Member States; (iii) very high liquidity of assets, allowing FAGACE to have the necessary resources in the event of realization of the guarantees; and (iv) an excellent level of capitalization, compared to zero debt.
FAGACE’s counterparty rating (AA-) benefits from 4 notches of external support, which WARA adds to its intrinsic rating due to the sovereign shareholdership of the Fund and its status as a multilateral development financial institution.
This rating is also based on the implementation of the 2021-2025 strategic plan which displays better standards in terms of governance standards, prudential financial standards and operational standards and an offer adapted to the economies of the Member States.
By raising its rating, WARA confirms the solidity of FAGACE’s fundamentals in a context of global economic and health crisis.
