Three up-and-coming African nations, Nigeria, Zambia and Kenya have each received their first sovereign credit rating by Moody's investor service.
They did trump that of South Africa despite it suffering a downgrade in September.
A Ba3 rating was awarded to Nigeria and a B1 rating was given to both Zambia and Kenya on Wednesday. All three were assigned a stable outlook.
Moody's downgraded South Africa from an A3 rating to a Baa1 in September this year.
The ratings judge how likely a country is to default on its debt and help to determine government's cost of borrowing.
According to the Moody's rating symbols and definitions, an A rating is considered to be a low credit risk, a Baaa rating is regarded as a moderate credit risk and may possess certain speculative characteristics, and a B rating is considered speculative and is subject to high credit risk.
Moody's said the Ba3 ratings for Nigeria reflected several factors. First is Nigeria's strong economic resilience and strength, which are underpinned by its vast hydrocarbon wealth and its relatively large size and developed non-energy sector but offset by significant infrastructure needs; second, the establishment of a sovereign wealth fund, which should support the country's financial strength; and third, the country's moderate event risk owing to heightened security conditions in the north and evolving governance structures, which form a key challenge for Nigeria's institutional strength.
It said the B1 ratings for Zambia reflected the country's rapid growth in recent years. "This should, over time, support economic diversification and wealth levels, which today remain low relative to its B1-rated peers." The rating also reflected the country's track record of political stability that, in turn, benefits its developing institutional strength as well as its low, albeit improved, financial strength after a significant write-off of its official debt in 2006.
Zambia's gross domestic product growth averaged 6.5% over the past five years and is expected to reach 7.3% in 2012 on the back of strong growth in copper and agricultural output. Foreign direct investment in the country continues to grow because its track record for political stability remains good.
The B1 ratings for Kenya reflected the resilience of the Kenyan economy as a result of ongoing structural changes that, over time, should boost the country's still low wealth levels; the government's commitment to institutional reforms, which could reduce long-standing political risks; and the low government financial strength, as reflected in relatively high debt levels and the country's vulnerability to a variety of shocks owing to political, external and security-related factors. Moody's said that a recent oil discovery in the northwest of the country also played a part in the rating decision.
The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking and the modifier 3 indicates a ranking in the lower end of that generic rating category.