Post-elections: Rating agency warns Nigeria over economic reforms

Posted by admin Headlines Thursday, May 5th, 2011

A renowned global rating agency, Fitch Ratings, has warned that Nigeria faces a ratings downgrade to B+ from BB- if the newly elected government fails to implement badly needed post-elections reforms to improve its outlook.

Fitch’s director of sovereign and international public finance Veronica Kalema, told Reuters in a phone interview, on Wednesday, that the successful conclusion of elections in Nigeria had removed some political uncertainty but the new administration had to implement reforms if its credit rating was to improve.

The global rating lowered Nigeria’s sovereign credit outlook to negative last October from stable, citing the depletion of its windfall oil savings and heightened political uncertainty ahead of elections at the time.

Fitch plans to visit Nigeria in August this year to better assess the new administration’s policies.

Kalema was quoted as saying, “With oil prices where they are, implementation of reforms will see the ratings improve but lack of reform progress will keep the rating where they are and if oil prices fall, the ratings will come under downward pressure.”

President Goodluck Jonathan won the presidential election last month with a wide margin over his main rival, Major-General Muhammadu Buhari (retd) of the Congress for Progressive Change (CPC), ending political uncertainty in the country.

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