Fitch Ratings, a global rating agency, has affirmed long-term foreign-currency issuer default outlook at ‘B-‘ with a positive outlook, listing the country’s progress in implementing reforms that improve policy coherence.
It said that Nigeria’s ‘B-‘ rating is supported by its large economy, relatively developed and liquid domestic debt market, and large oil and gas reserves, according to BusinessDay.
In May, the agency revised Nigeria’s long-term credit default rating upward from stable to positive on the back of reforms in the foreign exchange market, oil industry and monetary policy.
“The rating is constrained by weak governance indicators relative to peers, high hydrocarbon dependence, weak net foreign-exchange (FX) reserves, high inflation, ongoing security challenges, and structurally low, albeit improving, non-oil revenue,” the rating agent said.
It said that the positive outlook reflects progress in implementing reforms that improve policy coherence and credibility, and reduce economic distortions and near-term risks to macroeconomic stability.
These reforms include exchange rate liberalisation, monetary policy tightening and efforts to restore fiscal discipline, including the absence of deficit monetisation in recent months and phasing out fuel subsidies.
