Nigeria has received some good economic news – it’s first ever credit rating. Fitch Ratings, a leading global rating agency, has given Nigeria a “double-b minus.” It gives Nigeria a stable economic outlook based on its economic reforms. The rating puts Nigeria on a par with Brazil, Ukraine and Serbia, among others.
Veronica Kalema is a director with Fitch’s Sovereign Ratings Group in London. She spoke to English to Africa’s Joe De Capua about why Nigeria was given the long-term credit rating.
“A double-B minus rating for Nigeria is very good news because it just shows that if managed well its economy has really good prospects. The key factors underpinning the rating are the current government’s strong commitment to reforms, which allowed the Paris Club deal to go ahead. This extinguished all its bilateral debt and has resulted in a dramatic improvement in Nigeria’s public and external balance sheet. And therefore in a lot of indicators it is now it is on par or even stronger than other double-B rate countries,” she says.
Besides Nigeria lowering its debt servicing costs, Kalema says, “Additional revenues from higher oil prices have been managed much more responsibly than in the past. And that provides a buffer against adverse oil shocks.” She praises Nigeria for taking action against corruption, but says the country’s credit rating would have been higher if poverty was lower and civil institutions were stronger.