Rating Action: Moody's changes the Democratic Republic of the...

Rating Action: Moody's changes the Democratic Republic of the Congo's
outlook to negative; rating affirmed at B3
Global Credit Research - 08 Dec 2017

New York, December 08, 2017 -- Moody's Investors Service has today changed the rating outlook to negative from stable and affirmed the B3 long-term issuer rating of the Government of the Democratic Republic of the Congo (DRC).

The negative outlook recognizes the significant increase in macroeconomic volatility and external pressures amid an increasingly polarised domestic political scene, with downside risks to the economy, to the country's external position, and to international financial support. Macroeconomic volatility is likely to remain elevated until the presidential elections currently planned for late-2018.

The B3 rating remains supported by the government's low and affordable external debt, as well as the rebound in both commodity prices and mining activities in the country that should provide some support to the overall economy, budgetary revenues, and the level of FX reserves in the next 12 to 18 months. The rating remains constrained by low wealth levels and chronic institutional weaknesses.

WHAT COULD CHANGE THE RATING UP

Given the negative outlook, an upgrade in the near term is highly unlikely. A de-escalation in political risk that has weighed on the economy could lead to stabilisation of the outlook. Over the medium term, positive ratings pressure could develop in the event of (1) foreign investment in the mining sector, leading to much stronger commodity revenues in the budget; (2) an increase in foreign-exchange reserves and fiscal buffers to smooth any negative impact of external shocks on the economy; (3) further material strengthening of the institutions, the weakness of which remains a long-term constraint on creditworthiness; (4) accelerated fiscal reforms, including state-owned enterprises; and (5) continued capital expenditure to finance the renovation of the country's infrastructure, particularly with respect to power generation and its transport network.

WHAT COULD CHANGE THE RATING DOWN

Downward pressure on the rating could arise from factors that include (1) a rise in instability fuelled either by a resurgence of conflict in the east and/or further deterioration in the political situation that discourages financial support from the international community and foreign direct investment; (2) a large deterioration of the government's fiscal balance that leads to further macroeconomic imbalance and volatility beyond Moody's forecasts; and (3) a sustained decline in the prices of the main commodities exported by the DRC, heightening the potential for a balance of payments crisis.

Full link here: https://www.moodys.com/research/Moo...-Republic-of-the-Congos-outlook-to--PR_375934

In addition:
Demand for battery metals will drive African exploration, investment
1st December 2017

With regard to lithium, Harwood explained that there are enriched lithium pegmatite deposits in the Democratic Republic of Congo (DRC), Namibia and Zimbabwe. He noted that Montero chose to operate in Namibia because of its long mining history, the comparatively favourable regulatory environment, its “good” infrastructure and the “good” deposits.

Full article: http://www.miningweekly.com/article...exploration-investment-2017-12-01/rep_id:3650

I also came across this website:
https://www.concern.net/where-we-work/africa/democratic-republic-congo

"Concern Worldwide has been working in the Democratic Republic of Congo since 1994. Our focus is on providing humanitarian assistance, water and sanitation, and building livelihoods. Concern is currently implementing programmes in North Kivu, Tanganyika, Haut Lomami and Lomami (Kasai region) provinces."

Integrated (Livelihoods and Health) Programme
In Manono Territory, Tanganyika province,Concern is implementing a five-year Graduation Programme (2017-2021)targeting 1,000 households who are the poorest and most marginalized households to “graduate from” extreme poverty.(https://doj19z5hov92o.cloudfront.ne.../drc_programme_narrative_2018_rd_approval.pdf)

Just like to share some information I came across tonight. I hope the investors here can find this somewhat useful/relevant to the AVZ story during this period of turbulence.

GLTAH