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Fitch Ratings affirms Nigeria’s “B” rating with stable outlook

Nigeria’s ‘B’ rating is supported by the large size of the economy, a low general government debt-to-GDP ratio, amongst other variables.



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Fitch Ratings has revised Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B’ with a Stable Outlook.

The ‘B’ rating could be categorized as being in the non-investment-grade category when compared with the investment-grade category of ‘BBB’ to ‘AAA’. However, the ‘B’ may be seen to have a stable outlook as it is rated above the ‘CCC’ to ‘D’ (default).

This rating was supported by the large size of the economy, low debt-GDP ratio, small sovereign FX indebtedness of the sovereign, and comparatively developed financial system with a deep domestic debt market. However, the rating was suppressed by weak fiscal revenue, comparatively low governance and development indicators, high dependency on hydrocarbon, non-inclusive growth, and hyperinflation.

READ: Fitch downgrades Nigeria’s IDR to “B”, says CBN’s remedial policy not enough

Furthermore, external liquidity pressures amplified by the COVID-19 pandemic led to the weakening of the Nigerian economic structure. Fitch forecasts an average inflation rate of 16% in 2021 and 13.4% in 2022 driven by several cost-push factors.

Despite CBN’s estimate on backlogs of FX demand and foreign portfolios’ investment, Fitch believes that a backlog of FX demands for imports and capital repatriation will constitute a major drain on the reserves when FX supplies normalize.

Fitch projects that continuous actions by the CBN to defend the dollar could protect reserves but would increase the scarcity of hard- currency. Moreover, fitch draws attention to the dangers of currency over-valuation as it would harm the corrections of external imbalances in the Nigerian economy.

READ: CBN retains MPR at 11.5%, holds other parameters constant



  • Fitch forecasts negligible progress on boosting task revenue in the medium-term due to compliance issues, administrative capacity challenges, and resistance to the removal of tax credits.
  • More projections were made on reducing the ‘GGG’ deficit to 4% of GDP in 2021 and 2022 from 6.3% in 2020. This improvement in the fiscal deficit will be primarily driven by the recovery in oil prices to well above the levels assumed in the 2021 budget.
  • Fitch also raised concerns about the government’s attempts to eliminate implicit fuel price subsidy but retail prices are yet to align to the increase in benchmark prices of 2021, which could return the Nigerian economy to an implicit subsidy.
  • Due to the massive debt accumulated by the government borrowing from CBN, from 2015 to September 2020 of N13.2 trillion which constitutes 8.6% of GDP. Fitch raised concerns about the CBN’s ability to curtail inflation if this pattern continues.

READ: The Nigerian economy is increasingly dollarized but there is a way-out


Suggestions for improvement

Fitch suggests that the most pressing factors that could collectively or individually lead to the upgrade of Nigeria’s credit rating are;

  • Formidable resilience of external finance to address Nigeria’s on-going external vulnerabilities.
  • Further mobilization of non-oil revenue from the domestic sector.
  • Sustainable improvement of macroeconomic factors with a more inclusive economic growth.

What this means

  • The international credit rating agency, Fitch gave Nigeria a less than positive rating with an optimistic outlook of further reduction in inflation and Debt-GDP ratio.
  • The pros of Nigeria’s economy constitutes primarily on its large consumer economy, relatively small foreign currency indebtedness, and developing financial system.
  • However, the cons of the Nigerian economy were based on its weak fiscal revenue, less than desirable governance, growing dependency on hydrocarbon, weak growth rate, and high inflation.

Fitch Ratings, a credit rating agency that ranks the visibility of investments regarding their likelihood of default. The international scale credit rating of sovereigns public finance and infrastructure issues has a best-and-worst case rating ranging from ‘AAA’ to ‘D’ based on one’s historical performance.

Ubah,Jeremiah ifeanyi is a PhD candidate of Economics in Covenant university. He has held positions as the financial manager in Opera and is also a research ambassador in M&S research Hub. Ifeanyi is currently the financial market analyst for Nairametrics. Follow Ifeanyi on Twitter @ubahjc

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Just-in: President Buhari restores ownership of OML 123, 124, 126 and 137 to NNPC

The President has ordered the restoration of ownership of OML 123, others to NNPC.



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President Muhammadu Buhari has approved the restoration of the leases on OMLs 123, 124, 126 and 137 to the Nigeria National Petroleum Corporation (NNPC) which is in production sharing contract with Chinese government-0wned, Addax Petroleum.

President Muhammadu has approved the return of ownership of leases on OMLs 123, 124, 126 and 137 to the Nigeria National Petroleum Corporation (NNPC).

This announcement was made known by the President’s Senior Special Assistant on Media and Publicity, Garba Shehu via a social media statement.

“In line with the current administration’s commitment to the rule of law, fairness & enabling a stable business climate for investment, President @MBuhari has approved the restoration of the leases on OMLs 123, 124, 126 & 137 to @NNPCgroup which is in production sharing contract with Addax Petroleum, a company wholly owned by Government of the People’s Republic of China on the blocks. The leases belonging to the Federation were revoked on March 30, 2021,” Shehu tweeted.

The Presidential spokesman noted that the “development reaffirms the commitment of President Buhari to the rule of law and sanctity of contracts” as the Department of Petroleum Resources, DPR, have already been directed to retract the letter of revocation of the leases.

More details soon…

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Dangote acquires 400 trucks from ANAMMCO plant in Enugu, brings total to 4,000

Dangote Group has taken delivery of another set of 400 Shacman trucks from Transit Support Services Limited and assembled in the former ANAMMCO plant in Enugu.



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The Dangote Group has taken delivery of another set of 400 Shacman trucks from Transit Support Services Limited and assembled in the former ANAMMCO plant in Enugu.

This brings the total number of trucks bought by the Dangote Group from Transit Support Services Limited to about 4,000 units since the entry of the brand into the country in 2016.

According to a report from the Punch, this disclosure is contained in a statement issued by the Head of Public Relations and Media at the Transit Support Services Limited, Iyere Ikhide.

Ikhide in the statement said that the Dangote-Shacman partnership has led to the resuscitation of the ANAMMCO plant in Enugu.

It described Dangote as the biggest customer of the Enugu-based auto assembler, noting that the partnership had resulted in the provision of more jobs for many youths; rejuvenation of the Onne Port in Rivers State and the attendant economic benefits.

The statement from Transit Support Services Limited partly reads, “Following the partnership deal and commitments to quality, the biggest customer of Shacman brand in Nigeria, Dangote Group, has taken delivery of additional 400 units of Shacman trucks.

Dangote Group has since the entrance of Shacman vehicles into the Nigerian market through Transit Support Services Limited as Shacman Nigeria six years ago, bought over 3,500 units of the brand.’’

What you should know

  • It can be recalled that in February 2020, the largest Indigenous Industrial Conglomerate in West Africa, the Dangote Group, invested about N63 billion in a local automaker with an assembling plant in Enugu with the purchase of 3,500 trucks while going into a long-term partnership with them.
  • The automaker, which goes by the name Transit Support Services Limited, went into a long-term agreement with Dangote Group and has already supplied 3,500 Shacman trucks to the company from its Anambra Motor Manufacturing Company assembly plant in Emene Enugu State.

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