12 °c
London
Tuesday, October 3, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Budget

Nigeria’s rating at risk as debt, financing gap rise – Fitch

Staff by Staff
June 26, 2020
in Budget, Credit Rating, Currency, Debt, Economy, Finance, Forex
Reading Time: 2 mins read
0 0
0

A sharp rise in Nigeria’s sovereign debt and a ballooning financing gap could trigger a rating downgrade as policymakers in Africa’s biggest economy struggle to deal with the fallout from a coronavirus-induced oil price crash, a director at Fitch said.

The global ratings agency downgraded Nigeria to “B” in April with a negative outlook from “B+” citing aggravation of pressure on external finances.

Moody’s said in April it would likely downgrade the country if the government was unable to alleviate the damage to its revenue and balance sheet. S&P cut Nigeria’s rating in March on weakening external finances.

Nigeria – also Africa’s top oil exporter – is under increasing pressure to stimulate growth and cut debt after its first quarter current account turned negative, overvaluing its naira currency. The oil price slump has slashed government revenues.

“We have two elements that could lead us to take a negative rating action/downgrade on Nigeria. Aggravation of external liquidity pressures and a sharp rise in government debt to revenues ratio,” Mahmoud Harb, sovereign ratings director at Fitch, told Reuters.

Also read: Understanding the oil price decline and futures markets

The debt to revenue ratio for Nigeria is set to worsen to 538% by the end of 2020, from 348% a year earlier, before improving slightly next year, Harb said. The medium debt ratio for “B” rated countries is 350%, he said.

Nigeria will need US$23B to meet its external financing needs this year, Fitch estimates, noting that the country only has few options, including running down its reserves, after shelving plans to issue Eurobonds.

Abuja’s foreign currency reserves could fall to US$23.3B this year if foreign exchange access is normalised, Harb said, from around US$36B.

Nigeria has been restricting access since the pandemic to boost the naira, similar to a step it took when oil prices crashed in 2015, which worsened a 2016 recession.

The central bank is yet to provide currency to investors that need to leave Nigeria, weakening sentiment. Analysts estimate that around US$2B needs to exit Nigeria.

Nigeria could avoid a ratings downgrade if it strengthens its finances, reforms its forex policy and shows a path to reducing its deficit by boosting non-oil revenues, Fitch’s Harb said.

Source: Reuters

Related

Tags: Corona VirusCovid-19credit ratingcredit rating downgradeCurrencydebt to revenues ratioFitch RatingsforexForex tradingMoodysNigeriaNigeria's rating at risk as debt financing gap rise - FitchNigerian nairaoil price crashS&Psovereign debtStandard & Poor'sнигерияنيجيرياナイジェリア尼日利亚
Staff

Staff

Related Posts

The Forbes Billionaires’ list: Africa’s richest people 2022
Private Equity

European Bank for Reconstruction and Development backs MC IV Fund

by Africa Global Funds
September 29, 2023
Finance

UBS near settlement in Credit Suisse US$1.5B Mozambique tuna bond

by FurtherAfrica
September 29, 2023
Economy

Deriving maximum value from Namibia’s mineral resources

by Energy Capital & Power
September 28, 2023
Economy

Tanzania has started domestic gold purchases to boost forex reserves

by FurtherAfrica
September 28, 2023
Energy

South Africa debt a factor delaying energy import from Mozambique

by 360 Mozambique
September 27, 2023
Mozambique eVisa
 
MozParks

Translate this page

Read the Latest

Energy

Mozambique ENI’s float platform reaches 90% capacity

by 360 Mozambique
October 3, 2023
0

The Coral South FLNG project operated by Italian oil company Eni on behalf of the Area 4 Partners (ExxonMobil, CNPC,...

Read more

Angola CON 6 oil block with new operator

October 3, 2023

Ethiopia and China partner to nurture bamboo industry

October 3, 2023

Tanzania to take critical minerals stage after signing US$1B in deals with Australia and US

October 3, 2023

Akowe’s Blockchain solution revolutionizing academic verification in Nigeria

October 2, 2023

FurtherAfrica Partners Network

The Exchange Farmers Review Africa 360 Mozambique
TechGist Africa Energy Capital & Power Club of Mozambique
Taarifa Rwanda Web3Africa See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa  

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 107.3K other subscribers
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?