Morocco has emerged as Africa’s sole sovereign borrower with investment-grade status at Standard & Poor’s, after the ratings agency on Thursday lifted the kingdom to BBB-/A-3, restoring a label it lost in 2021 at the height of the pandemic downturn.
The upgrade places Morocco in a category reserved for governments deemed safe bets by bond markets, joining peers such as Hungary and Oman while most of Africa remains below the line.
The shift gives Rabat access to a broader pool of investors , including pension funds and insurers restricted to investment-grade assets, and should reduce the cost of future Eurobond issuances and syndicated loans.
S&P justified its move by citing Morocco’s resilience through consecutive shocks, from COVID to supply-chain strains and most recently U.S. trade tariffs, and by pointing to reforms that have stabilized public finances.
The agency forecasts real GDP growth averaging 4 percent between 2025 and 2028, a narrowing budget deficit of 3 percent of GDP by 2026, and a contained current-account shortfall near 2 percent of GDP.
The climb back was gradual. Morocco had long hovered at the edge of investment grade, rated BBB- until 2021, when S&P cut it to BB+. In March 2024, the outlook shifted from stable to positive, a precursor to this week’s upgrade.
By regaining the mark, Morocco breaks from a global trend of downgrades: Moody’s in May cut the United States one notch, while other advanced economies such as France and Italy face rising scrutiny over fiscal slippage.
For Morocco, the change to an investment-grade standing means lower yields on external borrowing and renewed investor confidence, potentially drawing more foreign direct investment at a moment when the government is pushing to finance infrastructure, energy transition projects, and industrial policy.
But risks remain, including agricultural volatility linked to climate change, persistent inequality, and debt sustainability will determine whether the kingdom can hold onto its regained status.
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