Tighter fiscal policy brings upgrade for Nigeria

Updated 07 November 2012

Tighter fiscal policy brings upgrade for Nigeria

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."

Financial crime leads to billions of lost business in Middle East, survey finds

Updated 24 May 2018

Financial crime leads to billions of lost business in Middle East, survey finds

  • Some 45 percent of MENA respondents in Thomson Reuters victims of fraud, corruption and bribery
  • 77 percent of MENA respondents deliberately avoided customers, suppliers, countries or industries viewed as most exposed to financial crime.

LONDON: Middle Eastern companies are losing billions of dollars in business opportunities because of fears about financial crime, according to a Thomson Reuters survey published on Thursday.

Concern about the possibility of severe financial and reputational damage due to regulatory breaches leads foreign investors and firms to shun companies and entire regions where they see “heightened risk.”

In the Middle East and North Africa (MENA), 77 percent of survey respondents said that they deliberately avoided customers, suppliers, countries or industries which they viewed as most exposed to financial crime.

“The impact in terms of lost opportunities at both organizational and national level is difficult to quantify, but likely to impact productivity and economic development,” Thomson Reuters said.

The report was conducted online by an independent third party in March 2018. More than 2,000 senior managers at large global organizations completed the survey, from 19 countries.

In a hard-hitting conclusion, the report said: “For the first time our research has put a price on financial crime: three and a half percent of corporate turnover for the 2,373 large companies in our survey alone. That adds up to a staggering $1.45 trillion.”

Financial crime was said to blight individual lives and undermine the ability of governments to provide key services such as education and health. The IMF has shown that it reduces economic growth and social cohesion.

Che Sidanius, global head of financial crime regulation at Thomson Reuters, said that financial crime caused “incalculable” harm around the world. The proceeds of activities spanning bribery, corruption, fraud, and narcotics trafficking have been implicated in the financing of terrorism, human rights abuses such as slavery and child labor, and environmental crime.

“This has serious economic and social costs in terms of the lost revenues to national exchequers that could be invested in social development, and in terms of the impact on individual lives,” Sidanius said.

Other key findings were that 45 percent of MENA respondents had been a victim of financial crime as opposed to 47 percent globally; 96 percent believed that bribery and corruption was an important issue to tackle; 57 percent indicated that the consequences of bribery and corruption meant less government revenue; only 59 percent said that they fully conducted due diligence; and only 60 percent fully conducted due diligence, the report said.