Tighter fiscal policy brings upgrade for Nigeria


Published — Wednesday 7 November 2012

Last update 7 November 2012 11:25 pm

| نسخة PDF Print News | A A

ABUJA: Standard & Poor's upgraded Nigeria's credit rating yesterday because of improved financial stability and optimism over reforms to the banking and electricity sectors.
Nigeria is among the world's top 10 crude oil exporters and a key supplier to the United States, China and India. It is Africa's second-largest economy after South Africa.
The ratings agency raised its long-term foreign and local currency sovereign credit rating to BB- with a stable outlook, three notches below investment grade, from B+. This brings its view in line with Fitch's rating.
Fellow ratings agency Moody's expanded its coverage to include Nigeria on Wednesday, assigning a Ba3 rating with a stable outlook.
Moody's said it also expanded its coverage to Kenya and Zambia.
"(Nigeria's) external reserve buffers have ... been strengthening on the back of high oil prices and strong exports," Standard and Poor's said in a statement.
"The government has sustained reform momentum in several key areas, including cutting the fuel subsidy and reforming the power sector, and the authorities have restructured and strengthened the previously troubled banking sector."
Nigeria's foreign exchange reserves have risen to around $ 42 billion, up from around $ 33 billion at the start of the year.
The Excess Crude Account (ECA), where it saves money it earns from oil exports over a benchmark prices, contains around $ 8.4 billion, compared with $ 2 billion at the end of 2010.
"I think it's justified and actually long overdue," said Stuart Culverhouse, head of research at Exotix.
"I don't have big concerns about debt or fiscal sustainability so the higher rating, which brings it into line with Fitch, is deserved."

What's happening around Saudi Arabia

JEDDAH: Labor Minister Mufrej Al-Haqabani has launched a series of electronic projects and facilities provided to the private sector companies, the SPA reported on Sunday.The projects and facilities include electronic visa issuance for the distinguis...
RIYADH: A high-powered team of officials from the Ministry of Health visited the hospitals in Jazan in the southern border to ensure services are in place to serve the patients in the region.The group of officials, comprising Dr. Nahar Al-Azmi, Dr. T...
YANBU: Like many Saudi women, Amani dreamt of becoming a mother, but was unable to have children of her own after many years of marriage. Therefore, she decided to spend her time taking care of orphans with special circumstances in Makkah.However, th...
RIYADH: A total of 43 warehouses were shut down in Jeddah for failing to take safety and health measures.Officials of the general department of Civil Defense in Jeddah carried out inspection at 165 industrial complexes in the industrial zone recently...
JEDDAH: A quarrel between two girls at the Al-Zahour Orphanage in Makkah took a violent turn recently, with one of them reportedly using a sharp instrument to attack the other and injuring her.The attacker was sent to a correction center, while the i...
RIYADH: A woman and three men died on Sunday after contracting the Middle East Respiratory Syndrome coronavirus (MERS-CoV) in Riyadh, bringing the total number of deaths to 507 since June, 2012.According to the latest report issued by the Ministry of...

Stay Connected