In its new Sub-Saharan Africa Credit Overview,

(CSD) Fitch Ratings says that it expects regional growth to remain above 5%, retaining its place as the second-fastest growing emerging market region after Asia. Growth will remain supported by infrastructure spending, the development of mineral resources and growing consumer spending. Strengthened policy regimes, efforts to improve the business environment, and rapid credit growth in some countries as financial markets continue deepening will support the development of the private sector.
In 2013, Africa is expected to continue benefiting from an influx of foreign direct investment, while some domestic capital markets are proving attractive for international investors. Low global yields and a growing appetite for African exposure may prompt more countries to issue debut Eurobonds, following Zambia's recent success.
Fitch's two rating actions since January 2013 reflect the divergent credit patterns across the continent. South Africa was downgraded to 'BBB/Stable' from 'BBB+/Negative' in early January, reflecting a deterioration in growth prospects, a widening in the current account deficit, delayed fiscal consolidation as well as heightened political uncertainty associated with high unemployment, social inequalities and strike action. In contrast, the Outlook on the Seychelles' 'B' rating was revised to Positive due to the country's improving credit profile supported by continued fiscal discipline, the reduction of contingent liabilities as well as the authorities' success in diversifying the tourist market - the main source of foreign earnings.
Fitch believes that a number of events will shape sovereign ratings across the continent in the coming months.
Kenya's upcoming elections in March could be an important inflection point. The likelihood of a repeat of the scale of violence seen in 2007/2008 is moderate, but incidents of ethnic violence are likely to increase in the run up to the polls and immediately after. Smooth elections that bring continued stability and a favourable impact on the investment climate would bolster creditworthiness whilst a repeat of the violence seen in early 2008 would be a major setback.
Ghana's full year fiscal figures for 2012, due to be released in the coming weeks, will reveal the extent of the election-year spending overshoot, particularly