ABUJA, Feb 3 (Reuters) – Ratings agency S&P on Friday affirmed Nigeria’s credit rating at “B-/B” but turned negative on its outlook, citing increasing risks to the country’s debt servicing capacity over the next one-to-two years.
Nigeria, a major oil exporter, has faced production shortages in recent years due to crude theft, though output has begun to recover. It has also suffered chronic dollar shortages and high debt service which has eaten into government revenues.
“Nigeria’s debt servicing capacity has weakened due to high fiscal deficits and increased external pressures,” S&P said in its statement revising outlook on the country from “stable”.
The country’s dollar-denominated government bonds had fallen on Friday ahead of the ratings review.
Nigeria’s Finance Minister Zainab Ahmed said on Thursday the ministry was due to send comments to S&P ahead of the ratings agency’s assessment announcement.
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S&P had maintained Nigeria’s rating at ‘B-/B’ with a stable outlook in 2022, while rivals Moody’s and Fitch both lowered the country’s rating by one notch last year.
Moody’s last week further downgraded the West African country to ‘Caa1’ from ‘B3’, its second downgrade in three months, saying the government’s fiscal and debt position was expected to keep deteriorating.
Ahmed disagreed with what she called a “surprise” downgrade of the country by Moody’s, insisting the government was already addressing the agency’s concerns.
Reporting by Chijioke Ohuocha, and Pushkala Aripaka in Bengaluru; Editing by Shailesh Kuber
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