S&P Affirms Nigeria’s Credit Ratings Despite Economic Challenges


Global rating agency Standard and Poor’s (S&P) has maintained its ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings on Nigeria. The agency also affirmed its ‘ngBBB+/ngA-2’ long- and short-term Nigeria national scale ratings with a stable outlook. Last August, S&P revised Nigeria’s outlook to stable from negative, acknowledging government reforms that could positively impact growth and fiscal outcomes if effectively implemented.

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The stable outlook considers the government’s capacity to continue the reform agenda against challenges such as below-potential oil production, macroeconomic stability risks, inflationary pressures, and currency volatility. S&P highlighted that risks to Nigeria’s ability to meet commercial obligations could prompt a downgrade, particularly if foreign currency reserves significantly decrease or fiscal deficits escalate.

Conversely, the agency mentioned a potential upgrade if Nigeria’s economic performance surpasses forecasts, leading to improvements in fiscal and external balances. This reaffirms a positive outlook for the nation despite challenges.

Fitch, another global rating agency, had also affirmed Nigeria’s long-term foreign-currency issuer default rating at ‘B-‘ with a stable outlook in November, crediting ongoing reforms. President Bola Tinubu’s reforms, such as removing the petrol subsidy and lifting currency controls, aim to salvage the country’s economic situation. However, these actions contributed to double-digit inflation, affecting consumers’ purchasing power and raising operating costs for businesses.

S&P acknowledged the significance of the reforms initiated since the Tinubu administration came to power but cautioned about the current challenges, particularly managing inflation and the exchange rate. While expecting reforms to enhance Nigeria’s creditworthiness over the long run, the agency indicated potential growth challenges in 2024 due to tightening monetary and fiscal policies.

The report recognized that Nigeria’s internal security has deteriorated in recent years, citing increased banditry, kidnappings, and general instability. Despite these concerns, the overall security situation is not expected to immediately improve, given persisting economic issues, unemployment, inflation, and rising poverty levels fueling militancy.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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