S&P reaffirms Nigeria at ‘B+’

Citing lower government and external debt, plus ample oil reserves, the rating agency Standard & Poors Standard and Poor’s Ratings Services (S&P) has affirmed Nigeria’s long- and short-term foreign and local currency sovereign credit ratings at ‘B+’.
S&P said the outlook on Nigeria is “stable”, reflecting its view that Nigeria’s non-oil economy will continue to support growth in its gross domestic product.
The rating is views by many as a resounding endorsement of the government of President Muhammad Buhari and its economic policies.
The agency said Nigeria’s rating is further supported by “relatively general government and external debt burdens, ample oil reserves and fairly robust growth in recent years”.
The agency acknowledged that Buhari has ordered all government revenues be transferred to a single account held at the Central Bank in a bid to curtail corruption and enhance government revenues.

Read also: S&P says devaluation is inevitable

The agency also said that “The stable outlook reflects our view that Nigeria’s non-oil economy will continue to support GDP growth and that external and fiscal balances will not increase significantly above our current expectations.
“We could lower the ratings if Nigeria’s external and fiscal positions deteriorate beyond our current expectations, or if Nigeria’s policymaking and institutional stability weaken.
We could consider an upgrade if external factors improve considerably (for example, due to a sharp or prolonged rebound in the oil price), or if Nigeria’s external and fiscal balances perform well above our expectations.”

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