Fitch Ratings has downgraded Nigeria’s long-term foreign and local currency Issuer Default Rating (IDRs) to ‘B+’ from ‘BB-‘ ratings, while long-term local currency IDR lowered to ‘BB-‘ from ‘BB’ on positive economic outlook.
The international rating agency had rated the country at ‘BB-‘ and ‘BB’ respectively in September 2015 with negative outlook.
The issued ratings on Nigeria’s senior unsecured foreign currency bonds have also been downgraded to ‘B+’ from ‘BB-‘ with the country Ceiling revised down to ‘B+’ from ‘BB-‘ and the short-term foreign currency IDR affirmed at ‘B’.
According to Fitch, Nigeria’s fiscal and external vulnerability has worsened due to a sharp fall in oil revenue and fiscal and monetary adjustments that were slow to take shape and insufficient to mitigate the impact of low global oil prices.
Fitch also forecasts the country’s fiscal deficit to grow to 4.2 per cent in 2016, after averaging 1.5 per cent in 2011 and 15, before it beginning to narrow in 2017.
it was gathered that he renewed insurgency in the Niger Delta lowering oil production, pressures on export revenues and the new FX regime introduced by the CBN among others may have informed the downgrades.
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