Credit agency Standard & Poor’s downgraded Nigeria’s rating to B+ from BB- on Friday, saying the decline in oil prices in the past seven months had significantly affected the country’s finances. It also said that political risks were significant
Here is the summary of their rating
• In our view, the decline in oil prices in the last seven months has significantly affected Nigeria’s external position and external vulnerability. We expect that the 2010-2014 surplus on the current account will turn to an average deficit of 1.8% of GDP in 2015-2018.
• We also believe that political risks are significant. The tightly contested general elections may pose risks to Nigeria’s external position and the implementation of what we view as the government’s ambitious fiscal consolidation plans, while the Boko Haram group continues to disrupt the northeast.
• Consequently, we are lowering our long-term sovereign credit ratings on Nigeria to ‘B+’ from ‘BB-‘.
• 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.