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Emefiele expresses satisfaction with S&P Rating on Nigeria

By on September 20, 2015

Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, has expressed satisfaction with the B+rating and stable outlook that was assigned to the country by global ratings agency, Standard & Poor’s (S&P).
“I am very pleased with it because it shows that they believe our story. We would continue on this path until we achieve a more stable economic environment.”
He stressed further that with the ratings, the CBN would continue to align with the fiscal authorities to ensure that the economy was fully diversified away from oil.
In the ratings officially released yesterday, S&P affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on the Federal Republic of Nigeria, stating the outlook was stable.
S&P in the rating which had been exclusively reported by THISDAY stated that its reaffirmation of Nigeria’s credit rating was because the country’s non-oil sectors would continue to support the country’s Gross Domestic Production (GDP) expansion.
It noted that President Muhammadu Buhari recently ordered all government revenues to be transferred to a single account held at the central bank, which it stressed would help curb corruption.
“At the same time, we affirmed our long-term national scale rating on Nigeria at ‘ngA’ and we affirmed the short-term national scale rating at ‘ngA-1’,” S&P said.
But it warned that it could lower the rating if Nigeria’s external and fiscal positions deteriorate beyond “our current expectations, or if Nigeria’s policymaking and institutional stability weaken”.
S&P stated that it 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 its expectations.
“The low oil price environment continues to impact Nigeria’s external and fiscal balances. The poor financial position of many states prompted the federal government and Central Bank of Nigeria to offer them financial support packages.
“We are affirming our long-term sovereign credit ratings on Nigeria at ‘B+’.
“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,” S&P said.
It noted that its ratings on Nigeria were constrained by its view of the country’s low GDP per capita; low level of development outside the oil sector; significant infrastructure shortcomings; internal political tensions; and weak, albeit strengthening, institutions.
Meanwhile, in line with the decision of the National Economic Council (NEC), a total of 19 out of the 27 states affected have so far benefitted from the workers’ salary bail-out package which is to enable them pay the backlog of workers’ salary arrears.
This was disclosed by CBN’s spokesman, Mallam Ibrahim Mu’azu yesterday.
He clarified that contrary to reports that Ogun State had accessed N20 billion, the actual amount received by the state was N18.9 billion.
On the tenor of the bail-out facility, he said all the states are having 20 year tenor except Ogun which opted for a 10 year tenor.
Earlier, states like Kwara, Zamfara, Osun, Niger, Bauchi, Gombe, Abia, Adamawa, Ondo, and Kebbi had applied for and received various sums from the bail-out facility. Other states include Ekiti, Imo, Ebonyi, Ogun, Plateau, Nassarawa, Sokoto, Edo and Oyo which were granted during the week.