Nigeria gets additional downgrade due to poor debt-service capacity – Proshare

Spread the love

Lagos, Feb.6, 2023 – Proshare has attributed Nigeria’s latest downgrade by Standard and Poor’s (S&P) to the increasing risk of the country’s poor capacity to service its debts in the next one-to-two years.

Proshare is a research and market information service company in Lagos.

The company said in its latest edition of “Analysts’ Insights” issued on Monday that S&P, on Friday “affirmed Nigeria’s credit rating at ‘’B-/B’’, but turned negative on its outlook”.

“While other rating agencies, Moody’s and Fitch, lowered the country’s rating by one notch last year, S&P kept the rating at ‘B-/B’ with a stable outlook in 2022.

“This downgrade is the second in 2023 after Moody’s agency downgraded the country to ‘Caa1’ from ‘B3’, owing to the deteriorating government’s fiscal and debt position.  

“S&P mentioned that Nigeria’s debt servicing capacity has weakened due to high fiscal deficits and increased external pressures.

“Analysts believe the multiple downgrades narrow Nigeria’s access to external funding and limit borrowing to only the domestic market.

“The dollar-denominated government bond should turn bearish in reaction to the S&P rating, seeing that Moody’s downgrade pulled down the market last week,” it said.  (GBN)

Leave a Reply

Your email address will not be published. Required fields are marked *