Credit ratings agency, Moody’s, has raised the Botswana Development Corporation (BDC)’s outlook to stable from negative, citing the expectation that the country’s economy will be boosted by the recent agreement in principle with De Beers.
As a wholly state-owned entity, the BDC’s credit rating is linked to government’s own outlook and the related forecasts around the country’s economic performance. In a recent update, Moody’s said the country’s economy was now projected to grow by 3.9% and 4.2% in 2023 and 2024 respectively, “partly driven by the new agreement in principle between government and De Beers.
The agency said the agreement is expected to increase the country’s share of diamond production, driving fiscal revenues higher and in turn bolstering economic activity.
The improving operating environment will support the BDC’s financial performance, in particular its profitability and asset quality.
The change in BDC’s outlook reflects the improving operating conditions and the expectation that the pressure on BDC’s financial performance will continue to ease, Moody’s said.
