Moody's Upgrades Credit Rating Outlook for CRRH-WAEMU

(Ecofin Agency) - The international agency explains this rating by the improvements in the economic environment in WAEMU, even though political tensions continue in Niger, Mali, and Burkina Faso.

Yesterday, Moody's announced it has upgraded the outlook for CRRH-WAEMU, the Regional Mortgage Refinancing Fund, from "negative" to "stable." The rating agency has also confirmed the institution's long-term local currency rating at Ba2 and foreign currency rating at Ba3. This makes CRRH-WAEMU one of the highest-rated financial institutions in the union.

Moody's attributed these changes to the notable improvement in the economic environment within WAEMU and the increasingly resilient credit profile of the West African Development Bank (BOAD), which holds a 24% stake in CRRH-WAEMU. The bank's rating was confirmed at Baa1, reflecting its financial strength.

The agency noted that its concerns about the operational environment in the broader WAEMU region, where CRRH-WAEMU operates, have eased. This shift is linked to the lifting of sanctions on Niger in February 2024, which had been imposed after a military takeover. As a result, CRRH-WAEMU has been able to recover its contributions from Nigerien banks. Moreover, the strengthened economic resilience of Côte d'Ivoire and Benin—supported by increasing economic diversification in Côte d'Ivoire and structural reforms in Benin—has further improved the regional bank's rating.

However, challenges remain for the institution. Moody's pointed out that CRRH-WAEMU's focus solely on mortgage refinancing limits its profitability and ability to diversify operations. To address this, it launched a housing loan guarantee program in May 2024, in collaboration with the African Solidarity Fund (FSA), aimed at improving access to financing for sector players. Political instability in Burkina Faso, Mali, and Niger, as well as their plans to leave the Economic Community of West African States (ECOWAS), could further escalate regional tensions.

CRRH-WAEMU is committed to enhancing its credit ratings to bolster its reputation among international investors, including those within WAEMU. The goal is to offer its shareholder banks competitive refinancing terms for housing loans.

Source: Ecofin Agency