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S&P lowers Nigeria’s sovereign credit outlook to negative

By on April 1, 2014

Standard and Poor’s, one of the world’s leading financial and analytical credit rating agencies, has revised its outlook on Nigeria’s sovereign credit to negative from creditwatch Negative, citing continued infighting within the country’s ruling party which has heightened political and institutional risks.

S&P, however, affirmed its ‘BB-’ long-term sovereign credit rating on Nigeria, according to Reuters.

The rating agency had a few weeks ago put the country on a credit watch after it tool a decision to review the country’s rating from“stable outlook”, an action which the Federal Government has since appealed.

S&P made its intention known a about three weeks ago, citing dearth of new information on the country, and the uncertainty surrounding monetary policies after the suspension of the Governor of the Central Bank of Nigeria, Mr. Sanusi Lamido, in February 2014.

Though the impending report does not translate to a downgrade of the BB- long term rating it gave the country last October, the federal government had to question the reasoning behind the review on the country’s stable outlook, stating that there had been positive macroeconomic developments since the release of the agency’s last rating on Nigeria.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had said the move by the agency was unacceptable, especially on the issue of lack of information.

She reportedly said the agency should have upgraded their information on the country by reaching out to the relevant contacts and agencies it deals with during the rating exercise.

She explained that S&P was under pressure last week to file its ratings on sovereign countries and other obligors owing to the change of regime imposed on rating agencies by the US government, which requires them to submit reports twice a year.

 

 

[Punch]

One Comment

  1. Boyede

    April 1, 2014 at 7:41 pm

    Standard and Poor’s is certainly unfair to lower Nigeria’s rating for such flimsy reasons when it is clear from our strong macroeconomic fundamentals that the economy has a positive outlook.