Fitch Ratings has affirmed Nigeria’s long-term foreign-currency issuer default rating at ‘B-‘ with a stable outlook, citing the reforms being implemented by the administration of President Bola Tinubu.

A year ago, the global rating agency lowered the country’s credit score to ‘B-‘ from ‘B’ and attributed the downgrade to continued deterioration in government debt servicing costs and external liquidity despite high oil prices in 2022. It affirmed this in May this year.

“Reform progress since President Bola Tinubu’s government came to power in May 2023 has been faster than we anticipated at our last review,” it said in a statement, citing the removal of fuel subsidies, the unification of the multiple exchange rate windows and the devaluation of the naira.

However, there has recently been some backtracking on reforms, notably a lower degree of price discovery in the FX market than in late June, raising doubt about the strength of this positive momentum, Fitch said.

Read also: Moody, S&P, Fitch upgrades in sight for Nigeria on economic overhaul

“In addition, new data on the Central Bank of Nigeria (CBN) suggests its net foreign-exchange position is substantially weaker than we previously understood,” it said.

The country’s rating is constrained by weak governance, structurally very low non-oil revenue, high hydrocarbon dependence, security challenges, high inflation, low net FX reserves and ongoing weakness in the exchange-rate framework, according to the rating agency.

Fitch views Tinubu’s cabinet, particularly Finance Minister Wale Edun, and the new CBN governor as supportive of reform.

“However, there are still sizeable socio-political challenges to implementation, including an acceleration in inflation, which could account for recent backtracking of some reforms,” it said.

Fitch said FX shortages has continued to weigh on economic activity and further FX liberalisation, and deter foreign capital.

In October, the CBN lifted the ban on providing FX for imports of 43 items, and began this week to clear nearly $6.7 billion of unmet FX forwards.

“However, there has been a renewed widening of the gap between the official and parallel exchange rates since July with a premium of over 30 percent over the official rate. Average daily FX turnover at the official exchange rate window has fallen back to near April 2023 levels (well below pre-pandemic), at $95 million in September,” the agency said.

Fitch flagged a lack of detail on a recent government announcement to raise $10 billion of FX, including whether this includes World Bank budget support loans of $1.5 billion.

It said the country’s public debt (excluding CBN loans) has a fairly long average maturity of 9.7 years.

It said: “The securitisation of N23 trillion of CBN loans at a lower interest rate of 9 percent has helped contain general government interest costs, but at near 42 percent of revenues, overall interest expenditure is well above the ‘B’ median of 10.9 percent.

“We expect much lower recourse to CBN financing in 2023-2024 than in 2022, although there is a risk demand from the domestic banking sector turns out to be weaker than expected, despite its ample liquidity and strong deposit growth (38 percent in 1H23 year-on-year).”

Fitch forecasts general government debt/GDP to stabilise at 43.9 percent of GDP in 2024-25, having risen from 35.2 percent at the end of 2022 on the depreciation of the naira.

“We project GDP to slow to 2.6 percent in 2023, from 3.3 percent in 2022, and to expand 3.2 percent in 2024 driven by the services sector and higher oil production. Nigeria’s already structurally high inflation rose to an average of 25.5 percent yoy in 3Q23, from 20.3 percent yoy in 3Q22, partly reflecting fuel subsidy removal and naira devaluation,” it said.

uniqueuser:
Common Man wan see am for price of food

Oblongata:
This is a positive report and our economy is geared on a recovery process!

We must support our government regardless our political affiliations!

Forward we must!!!

TheOgaBoss:
no it is not a positive report, except u have a problem with comprehending the English used.

socialmediaman:
Summary:

The Fitch projection is based on promises of reforms that this government has made

The same fake promises they have been making since 2015

Look at the chairman of the party promising reforms. Nobody takes them seriously anymore

Oblongata:
This is a positive report and our economy is geared on a recovery process!
We must support our government regardless our political affiliations!
Forward we must!!!

Oblongata:
This is a positive report and our economy is geared on a recovery process!

We must support our government regardless our political affiliations!

Forward we must!!!

KingOfTheDamned:
I knew it would be sukanmi who brought this post 🤣🤣🤣

This boy creates threads and topics he doesn't understand or grasp the grammar written within then he tries to type words like opari and other pidgin words to try to seem like a true Patriot when I'm reality he just doesn't understand the economics or facts 🤣

@sukanmi aka freestuffsng let me enlighten you.

The nation is in a dire situation no amount of.propaganda or gaslighting can change that .

While I understand the need to be optimistic one must avoid delusional rants and myopic Outlook that tends to make one call an apple a bicycle .

The government policies so far while obviously deliberate to stem the massive inflation are just not enough to save the situation .

The dollar is rising and the naira falling steadily not due to hoarding as you always childishly state but due to corruption and looting of the scarce resources meant to back local production and development.

The hoarding by street fx traders isn't killing the naira as you like to naively point out daily but instead the mismanagement of the resources by this president and his cabinet is doing much worse.

How can he approve N395 billion for cars for senators when we have a dying economy?

The mismanagement is killing the naira more because when you have a country where the politicians show such financial recklessness foreign investors will run hence why less and.less foreign investors are looking at Nigeria are a point to consider for investment. Egypt is the new frontier same with Kenya and south Africa . No investor will trust their hard earned resources with a. Reckless government

So all your under the bridge propaganda will not save the nation 🤣🤣🤣

Again I advise you stick to the romance section since you clearly do not understand basic economics and it's implications

Or better still stay away from politics and let the adults talk and stick to selling those your nonsensical ebooks that no one wants 😎

KingOfTheDamned:
I knew it would be sukanmi who brought this post 🤣🤣🤣

This boy creates threads and topics he doesn't understand or grasp the grammar written within then he tries to type words like opari and other pidgin words to try to seem like a true Patriot when I'm reality he just doesn't understand the economics or facts 🤣

@sukanmi aka freestuffsng let me enlighten you.

The nation is in a dire situation no amount of.propaganda or gaslighting can change that .

While I understand the need to be optimistic one must avoid delusional rants and myopic Outlook that tends to make one call an apple a bicycle .

The government policies so far while obviously deliberate to stem the massive inflation are just not enough to save the situation .

The dollar is rising and the naira falling steadily not due to hoarding as you always childishly state but due to corruption and looting of the scarce resources meant to back local production and development.

The hoarding by street fx traders isn't killing the naira as you like to naively point out daily but instead the mismanagement of the resources by this president and his cabinet is doing much worse.

How can he approve N395 billion for cars for senators when we have a dying economy?

The mismanagement is killing the naira more because when you have a country where the politicians show such financial recklessness foreign investors will run hence why less and.less foreign investors are looking at Nigeria are a point to consider for investment. Egypt is the new frontier same with Kenya and south Africa . No investor will trust their hard earned resources with a. Reckless government

So all your under the bridge propaganda will not save the nation 🤣🤣🤣

Again I advise you stick to the romance section since you clearly do not understand basic economics and it's implications

Or better still stay away from politics and let the adults talk and stick to selling those your nonsensical ebooks that no one wants 😎

FreeStuffsNG:
This is a fairly balanced report to show that we are on the forward march to greater economic leap and I commend Fitch for this report.

I am surprised that Fitch did not consider the impact of Dangote Refinery, how local production of petrol, diesel, fertilizers that will stop importation of these petrochemical products will significantly lower our fx outflows in 2024 and beyond.

Secondly, the tax reforms will significantly reduce tax burdens on struggling businesses, the import substitution for imported products that are now expensive, the revival of the mining industry and marine blue economy and the fact that 2024 is no election year that comes with huge INEC budget provision for elections and the attendant heightened socioeconomic and political risks.

If the omitted positive and significant factors above, ceteris paribus, add to the confidence rating they gave the competent President who is directly leading the reforms, effective alignment of both fiscal and monetary policies by the brilliant duo of Mr Yemi Cardoso who leads the CBN and Mr Wale Edun , the Coordinating Minister of the Economy and Finance, my expectation is that we will exceed the 3.2% GDP growth projected by Fitch for 2024. I see us doing like between 3.8 and 4.0% GDP growth.

By 2024, I will suggest that we rebase our GDP as experts have provided data to proof that our economy ,as at today, has grown to a $600 billion GDP economy.

I am so happy and profoundly proud of the extremely competent, brilliant and patriotic Nigerians driving our economy at the moment.

They are shaming all the naysayers and enemies of Nigeria back to back with massive success. This is a tested, experienced, brilliant team forged in Lagos that catapulted Lagos to the top echelon of the best economy in Africa within a decade. Nigeria is reaping from the seed of hardwork, excellence and patriotism we sowed, nurtured and guided jealously in Lagos so that at a time like this, we will redeem Nigeria and restore our greatness right from the point President Buhari stopped his tenure.

At the moment, Nigeria is in the hands of the best of the best among us. Only sore losers will not support progress.

This is the best time to invest in Nigeria and there's no better, safer and more investor-friendly region of Nigeria than the South West, Lagos and the neighbouring Yoruba South West Nigeria states.

Bring your investments to South West Nigeria for great returns on investment and the best investor friendly experience.
May God bless Nigeria for ever!

Eriggs:
Shame to all enemies of Nigeria.
You will all labour in vain and wail to death