In a recent assessment, S&P Global, a prominent credit ratings agency, has affirmed Nigeria’s credit outlook, maintaining a stable projection for 2024. The short-term foreign and local currency sovereign creditworthiness is affirmed at ‘B-/B’, while long and short-term national scale ratings stand at ‘ngBBB+/ngA-2’.
The positive outlook is attributed to a series of comprehensive reforms, including the liberalization of the naira and the elimination of the fuel subsidy.
S&P Global recognizes these measures as steps to boost non-oil revenues and increase domestic refining capacity. However, the report underscores the challenges of managing current effects on inflation and the exchange rate.
While expressing confidence that these policies will benefit Nigeria’s creditworthiness in the long run, S&P Global emphasizes the immediate difficulties in navigating the impacts on inflation and the exchange rate.
The stable outlook is said to balance the government’s capacity to continue its reform agenda against challenges like below-potential oil production and risks to macroeconomic stability and confidence stemming from inflationary pressures and a volatile currency.
The agency outlines potential downsides, stating that ratings could be lowered over the next 12 months if increasing risks emerge in Nigeria’s ability to repay commercial obligations.
This detailed assessment provides a nuanced perspective on the country’s economic landscape, considering both positive reforms and potential challenges in the near future.
