Na wa OOO. The man has not even settled into his new tenure and Fitch are already warning him against failing. The conclusion of the article (see bolded section of last paragraph) is what some of us have stated continuously .



http://www.leadershipeditors.com/ns/index.php?option=com_content&view=article&id=30223:fitch-to-downgrade-nigeria-if-jonathan-fails-on-reforms&catid=51:cover-stories&Itemid=142

Fitch To Downgrade Nigeria If Jonathan Fails On Reforms

Wednesday, 04 May 2011 23:38 Isaac Aimurie, Abuja, with agency reports


The director of sovereign and international public finance at Fitch,  Veronica Kalema, yesterday said  Nigeria could face a ratings downgrade to B+ from BB- if the newly-elected government fails to implement badly needed reforms  to improve its outlook.

Fitch Ratings lowered Nigeria’s sovereign credit outlook to negative last October from stable, citing the depletion of its windfall oil savings and heightened political uncertainty ahead of elections at the time.

The successful conclusion of elections in Nigeria has removed some political uncertainty, but the new administration must implement reforms if its credit rating is to improve, Kalema told Reuters in a phone interview.

“With oil prices where they are, implementation of reforms will see the ratings improve, but lack of reform progress will keep the rating where they are and if oil prices fall, the ratings will come under downward pressure,” Kalema said.

President Goodluck Jonathan’s triumph at the presidential election held last month ended political uncertainty in Africa’s most populous nation, the report said.

Kalema said the elections were more credible than previous ones, marking a positive sign for the country, but that wasn’t sufficient to make a ratings change.

“If reforms are implemented the rating outlook could be revised back to stable, but if not it could be downgraded to ‘B+’,” she added. Kalema said the new government would have to implement reforms including establishing a sovereign wealth fund to protect its windfall oil savings and run a more fiscally prudent budget before the country’s ratings outlook can be raised.

Rival ratings agency Standard & Poor’s currently rates Nigeria a ‘B+’.

As Africa’s top oil exporter, Nigeria relies on the commodity to generate more than 70 per cent of government revenues.

Oil has stayed above the $100 per barrel since the start of the year, but Nigeria’s credit rating remains hampered by poor governance, Kalema said.

Fitch plans to visit Nigeria in August to better assess the new administration’s policies.

Analysts say risk perceptions for Nigeria have improved after the elections and the potential for policy continuity could encourage the return of foreign capital to the country.

Accounting firm Ernst & Young on Tuesday said Nigeria could be among the top 10 countries to see a boost in new foreign direct investment (FDI) over the next few years.

The country  has been building its foreign reserves which stood at $33.2 billion as at end of March given higher oil price, after they fell from $40.7 billion in March 2010.

“The things that they need to do are not so complicated but it’s just that up until now there has been a lack of political will,” Kalema said.

what reforms did he promise?

federalism? no

state police? no

weak center? no

lol i mean he didnt really promise anything from the jump.

sbeezy8:

what reforms did he promise?

federalism? no

state police? no

weak center? no

lol i mean he didnt really promise anything from the jump.

I think the article makes it clear that "reform" , in this case , is not an exponent of the promises made by Jonathan. Rather , "reforms" concern changes that must be implemented and can no longer be put off if Nigeria is to make progress. We all know , for example , that power sector "reform" is totally sacrosanct regardless of whatever promises GEJ has made/not made.

Their ratings are unimportant at the moment.

J12:

Their ratings are unimportant at the moment.

I think you are wrong - for a country seeking FDI i will say rating are important - would u like to throw your money at a failed economy and also when it comes to government seeking to raise a bond - ratings do help in getting favourable interest rates.

@post

GEJ is suspect when it comes to handling economic matter - A man selecting ministers from a pool of Akala, Oyinola , Bankole, Iyabo and other failed politicians

blacksta:

I think you are wrong - for a country seeking FDI i will say rating are important - would u like to throw your money at a failed economy and also when it comes to government seeking to raise a bond - ratings do help in getting favourable interest rates.

@post

GEJ is suspect when it comes to handling economic matter - A man selecting ministers from a pool of Akala, Oyinola , Bankole, Iyabo and other failed politicians

Who's going to nominate these people? Don't the state governors nominate ministerial candidates anymore?