Standard and Poor’s (S&P), a global rating agency, at the weekend affirmed its ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings for Nigeria.
The leading ratings agency in a statement on Friday, also affirmed its ‘ngBBB+/ngA-2’ long- and short-term Nigeria national scale ratings, stating that “the outlook is stable.”
It stated: “The stable outlook balances the government’s capacity to continue the reform agenda, which, if delivered, should support growth and fiscal outcomes, against below-potential oil production and risks to macroeconomic stability and confidence from inflationary pressures and a volatile currency.”
The agency stated that on a downside scenario, it could lower the ratings over the next 12 months if we see increasing risks to Nigeria’s capacity to repay commercial obligations.
S&P expatiated: “This could arise, for instance, from significantly reduced usable foreign currency reserves, much higher fiscal deficits or debt-servicing needs, or because domestic financial markets are unwilling to absorb additional local currency debt issuance.
“We could raise our ratings over the next 12 months if Nigeria’s economic performance significantly exceeds our forecasts, and fiscal and external imbalances improve significantly”, it added.
It would be recalled that last August, the agency revised its outlook on the nation’s economy to stable from negative, hinging its forecast on the recent reforms of government which it believes could benefit the country’s growth and fiscal outcomes if delivered.
Also, another global ratings agency, Fitch, last November also affirmed Nigeria’s long-term foreign-currency issuer default rating at ‘B-‘ with a stable outlook, citing the ongoing reforms of the government for its projection.
