₦airaland Forum

dipoolowoo:
**Affirms Country’s B1 Rating With Stable Outlook

By Modupe Gbadeyanka

Moody's Investors Service on Friday affirmed the B1 long-term issuer rating of the government of Nigeria with a stable outlook just as it forecasts that real GDP growth will rise to 2.5 percent in 2017 and accelerate further in 2018 to 4 percent.

The global rating firm disclosed that the key drivers for these were the medium term growth prospects remain robust despite the current challenging environment, with the rebound in oil production helping to rebalance the economy over the next two years; and the government's balance sheet, which it said remains strong relative to its peers, resilient to the contractionary environment and temporarily elevated interest payments while the authorities pursue their efforts to grow non-oil taxes.

The long-term local-currency bond and deposit ceilings remain unchanged at Ba1. The long-term foreign-currency bond and deposit ceilings remain unchanged at Ba3 and B2, respectively.

Moody's said it expects Nigeria's medium term growth to remain robust, driven by the recovery in oil output and also over the near term, it expects Nigeria's economic growth and US dollar earnings to improve in 2017, supported by a recovery in oil production.

According to Moody’s, after an estimated -[/s]1.5 percent real GDP growth in 2016[/s], it forecasts real GDP growth to rise to 2.5% in 2017 and accelerate further in 2018 to 4%. A rebound in oil production to two million barrels per day (mbpd) will, if sustained, enhance economic growth and support the US dollar supply in the economy.

It noted that Nigeria has made significant gains in terms of governance and transparency in the oil sector. Improved availability of data, progress in restructuring the Nigerian National Petroleum Company (NNPC), rising effectiveness of operations at the refineries and a readiness to tackle difficult issues with partners (such as funding issues at the Joint Ventures) speak to a material improvement in the operating environment. The Petroleum Investment Bill (PIB bill), which had been blocked for 8 years in parliament, has been reactivated with a portion of the law drafted and passed by the Senate. Moreover, militant activity in the Niger Delta is set to wane following the resumption of payments from the government, though it will remain a threat to the recovery of the economy.

Moody’s further said the economy is also likely to benefit from the more timely implementation of the 2017 budget than its predecessor and in particular from the increase in capital spending on infrastructure which that will allow.

It also said the scarcity of Dollars, worsened by the soft capital controls imposed by the Central Bank of Nigeria (CBN), is likely to continue to negatively affect important sectors of the economy especially in services and manufacturing sectors.

“We do not expect the current policy mix to significantly change over the short term but a gradual easing of restrictions is possible as foreign currency receipts improve with rising oil production,” the firm said on Friday in a statement obtained by Business Post.

In 2017 and 2018, we expect Nigeria's balance of payments to move back into surplus, supported by government external borrowings and a falling current account deficit. The latter is quickly reducing, supported by falling imports and increased oil production.

Depreciation of the naira, soft capital controls and current dollar scarcity have been relatively effective at constraining imports. We expect foreign exchange reserves to grow modestly in 2017. While improved foreign investor sentiment should support the rebalancing of the economy over the medium term, with the return of portfolio investors improving dollar liquidity in the country, the continued existence of a parallel, unofficial foreign exchange market is likely to act as a strong deterrent over the near term.

RESILIENT GOVERNMENT BALANCE SHEET STRONGER THAN PEERS' DESPITE TURBULENCE

Moody's says it expects the medium-term impact of the oil price shock on Nigeria's government balance sheet to be contained, and recent erosion of debt affordability to be reversed.

The effect of the recent downturn on the government's budget sheet has been contained as the authorities have been able to offset the shortfall in revenue with large cuts in capital expenditure. As a result, Moody's forecasts a budget deficit of 3 percent of GDP in 2016, comprised of a 2 percent of GDP federal government budget deficit and around 1% of arrears split between federal, state and municipality levels of government, it explained.

Moody's forecasts the federal government deficit to remain around 2% of GDP in 2017 and 2018, with large capital expenditure outlays resuming as the government's cash flow situation improves. Based on these underlying projections, Nigeria's balance sheet will continue to compare favourably with peers', with government debt remaining well below 20% of GDP over the coming years against 55% median for B1-rated peers.

By end-2016, Moody's estimates the government debt stock will be comprised of 85% domestic borrowing and 15% external debt, resulting in a manageable external debt profile. Government external debt amounts to just 2.9% of GDP, with interest payments set to remain low, at around $330 million dollars per annum. Domestic debt has increased significantly in recent years, reaching its current level of NGN10 trillion. Around 30% of this debt is comprised of costly T-bills, which have increased refinancing risk and interest rate exposure. However, Moody's expects the ratio of interest payments to government revenues to peak at 20% for general government, and close to 40% of revenues for federal government in 2017.

Although debt service costs are high, Nigeria's domestic capital market is sufficiently developed to accommodate the yearly public sector borrowing requirements of around NGN5.5 trillion. This is another positive credit feature that distinguishes Nigeria from many similarly rated peers. The country's banking sector is well-capitalised and liquid and the national pension fund still has additional capacity. Should banking sector liquidity decline, the Central Bank of Nigeria has tools at its disposal to support appetite for government securities, including lowering the cash reserve requirement ratio from its presently high level of 22.5%. However, appetite for government securities remains strong, with all instruments remain oversubscribed.

Moody's expects the recent increase in debt service costs to prove temporary, as a result of i) the government' initiatives to expand the non-oil revenue base, and ii) efforts to improve the structure of government debt.

Measures by the Federal Revenue Inland Service are expected to increase non-oil revenue to around NGN4 trillion in 2016 from NGN2.5 trillion in 2015. These include a tax amnesty on penalties and interest on tax liabilities due in 2013, 2014 and 2015. However, not all the initiatives have proven successful: the independent re-appropriation of revenues from the ministries departments and agencies (MDAs) has yielded disappointing results so far. Such outcomes highlight the considerable execution risks inherent in the transition to a less oil-dependent federal budget, and the implications for the government balance sheet should it not meet its objectives.

The government's medium-term debt strategy should also help to lower the interest burden. The debt strategy is geared towards exchanging costly short-term debt with long-term concessional borrowing. Although a portion of future external borrowings are expected to be raised through the Eurobond markets, this is likely to be complemented with ongoing support from other multilateral institutions including the African Development Bank and the World Bank. The combined effect of these measures should help to bring interest payments/general government revenues down to 16.8% by 2018, from an estimated 19.8% in 2016.

RATIONALE FOR THE OUTLOOK AT STABLE

The stable outlook is driven by Moody's view that the downside risks posed by the weakening of the country's fiscal strength, and the external and economic pressures anticipated this year and next, are balanced by Nigeria's strengths, which exceed those of sovereigns rated below B1. In 2016, Nigeria's external vulnerability indicator of 31% will remain far below the expected B1 median of 51%, while its debt-to-GDP of 16.6% will remain far below the expected B1 median of 55%. Set against that, its expected debt servicing burden in terms of interest payments to revenue of 19% is more than double the B1 median of 9%. To a large extent, Moody's believes that this reflects Nigeria's underdeveloped public sector revenue base, a credit weakness that the administration is attempting to address.

WHAT COULD CHANGE THE RATING UP

Positive pressure on Nigeria's issuer rating will be exerted upon: 1) successful implementation of structural reforms by the Buhari administration, in particular with respect to public resource management and the broadening of the revenue base; 2) strong improvement in institutional strength with respect to corruption, government effectiveness, and the rule of law; 3) the rebuilding of large financial buffers sufficient to shelter the economy against a prolonged period of oil price and production volatility.

WHAT COULD CHANGE THE RATING DOWN

Nigeria's B1 issuer rating could be downgraded in the event of 1) a greater-than-anticipated deterioration in the government's balance sheet or continued erosion of debt affordability, for example resulting from the failure to implement revenue reform; and 2) lower than expected medium term growth, for example as a result of delays in implementing key structural reforms, especially in the oil sector, or continued militancy in the Niger Delta, which undermine the level of oil production over the medium-term.

GDP per capita (PPP basis, US$): 6,184 (2015 Actual) (also known as Per Capita Income)

Real GDP growth (% change): -1.5% (2016 Estimate) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 19% (2016 Estimate)

Gen. Gov. Financial Balance/GDP: -2.9% (2016 Estimate) (also known as Fiscal Balance)

Current Account Balance/GDP: -0.6% (2016 Estimate) (also known as External Balance)

External debt/GDP: 4.2% (2016 Estimate)

Level of economic development: Low level of economic resilience

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 7 December 2016, a rating committee was called to discuss the ratings of the Government of Nigeria. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer's susceptibility to event risks has not materially changed. Other views raised included: the issuer's institutional strength/framework, have not materially changed. The issuer's governance and/or management, have not materially changed.

The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2015. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

http://www.businesspost.ng/2016/12/11/nigeria-moodys-predicts-2-5-gdp-growth-2017-4-2018/

What's the impact of the 1.5% growth? Who felt it?

dabossman:
Hhm, but when CNN reports the war in Syria and Iraq it is journalism at it's best. The earlier we all accept the fact that we are in an Information Age the better for us all. News spreads fast and is easier to share now than in the days when you had to buy newspapers or wait for NTA News at 9pm. So enough with all this talk about media hype, media trial and what not.

Mr Lai just said the media is their greatest enemy. Are you trying to contradict him?

ghuzy01:
See excuse.lmao

OMG! Tell me the man beside Ajimobi isn't Akala.

freeman95:
very good
them don fvck all the girls for OKUKU campus finish


if u have any female u know coming to uniosun, make sure u include some packs of condom and postinor.....

Your generalisation seems wrong, I can tell you that many ladies there don't do shit. It's about how you carry yourself, most of the ladirs involved in the act actually offered themselves in return for grades. I was there from 2010-2014.

Eliteklaus:
Femi my guy while wot u r saying might b true u gat to realise that 1 my presidog does not know d law nor does he is care abt d law. Mama madu once said d SSS has d right to detain a 'bad' person even if d courts order his release

A bad person? That person must be a 'bad shild'. In Nigeria, na DSS, SSS and NA superior pass.

sekundosekundo:
My friend, stop reasoning like a spoon fed child. Do you think that this government have told you all the underground deals going on in this swap. Before now can you imagine that they do carry BH prisoners to a location for swap, if they have succeeded in this secret swap wouldn't the Army hv come and tell us how they fought in Sambisa and rescue 50 chibok girls. Just watch, very soon BH will lay ambush and recover those their men the Nigerian Army are moving up and down in the name of swap.

You're very right, just like the air raid that killed 300 Bokoharam members but wounded Shekau, the bullets sef know who to kill, then after, a wounded Shekau still escaped Hale and hearty Nigeria Army, they usually don't think before they write.

k4kings:
Am so disappointed at dis givt nd its police services..... U tried to settle d mata amicably by doing what exactly? I weep for this country; a country where you cannot express yourself; a place where your opinions dont count; a country full of intimidation nd supression... One thing is sure; one day e go better... Let us believe... Joy will come in d morning

There's no morning, it's eclipse!

Tolexander:
Hey young man, stop blabbering!

You said the police is lying, yet you believe the guy saying he named the dog after Buhari his hero.

Anybody can be charged to court if the plaintiff reports any provocation, it is up to the defendant to go and defend himself in court.

Mr wise, why didn't the plaintiff sue the defendant? Why the npf?

aisammy4:
Why him de hide his name? Shameless NFF people. E easy to win bronze medal na eim other countries de struggle to win am.

Please, this is a Public Notice to the President, Muhammadu Buhari,

Your Excellency Sir, Please fire all this NFF people before them spoil your name. Dem no get shame at all. They are even ready to hijack the $390,000 given this young boys that won the bronze.

Sir, please treat this as VERY HIGH PRIORITY.

Shameless govt and officials

Who's Buhari? :S

spytime:
Is not a currency swap but the deal is to make it easier for importers that are importing from China to get the currency from local banks and use the Chinese currency to import instead of using the dollar the CBN is working on that so relax.

Since when, till when? Try to be logical in your lies.

moscobabs:
why can't he named the dog Ojukwu, Nnamdi KANU or his father's name?


he was arrested not because he named the dog Buhari but cos he write the name on the dog and parading it in Hausa community and we all know Buhari is Hausa name

his action can break peace .

simple!!

You reason just like the Mumu Hausas. Who Buhari don ep? If you like, name you monkey Obasanjo and parade it at Ota, who cares?

kutchs:
So because the FG isn't owing him allowance he shouldn't say what he feels again ehh?
By the way what can the money the FG pay him get in the market?
Do I need to remind you that the amount he gets monthly can't get a bag of rice.

Nick is either not conscious of his environment or fantastically stup*d, which FG no dey owe? Ask the corpers around you when they get alert.

NickMarvel:
Rubbish... Out of over 100million Nigerians, I can see only 2000+ votes giving this rating and the so called media outlet is not ashamed to classify this as what Nigerians think in public.
These medias are significantly a very big part of out problems in this country.

Since light has almost been constant for some time now, they have never classified that as news. Since militants come out and make noise with doing anything, these stupid media don't see all that as news. Boko Haram is already a dead story and they don't see all that.

They are only focused on getting disturbing and annoying information to make the public cry out to them while they are busy pocketing their money.

Don't be surprised when we all finally hear that the major sponsors of violence in the country are from these so called media who tend to survive more on spreading bad news.

Before now, there's always been an increase in supply of electricity during the rainy season, so only shallow thinkers amd sycophants will praise Buhari for bringing us rainy season.

bellong:
If anyone is in need of Australian dollars, someone wants to sell.

He wants N265 = $1Aud

If you are interested, you can contact me.

Negotiable?

dessy8:
This proof of funds thing is pretty straightforward nawww.....There are two options..Annual income option::The annual income option requires a student to provide evidence of personal annual income of at least AUD 60,000. For students accompanied by family members, the requirement is at least AUD 70,000. The income demonstrated must be the personal income of your spouse (who is not coming with you) or parents. Where both of your parents are working, their combined income can be considered for this requirement. Evidence must be in the form of official government documents such as tax assessments. Evidence in the form of bank statements or information directly from an employer is not acceptable.

2nd Option::Living costs

From 1 July 2016, the 12 month living cost is:

student or guardian - AUD 19,830
partner or spouse - AUD 6,940
child - AUD 2,970....

What this means is that you choose one of the options, not both...If you cant use option 1..you use option 2.....

People still harbour the fear of option 1 while 2 to me, seems easier and straightforward.

udz:
okay to break it down if u have at least a score of 60 ielts, 50 Pte English scores and like N10,000,000 acct balance. it will fly...

#10,000,000 ke? In this contemporary Nigeria? Not everyone got a handshake from Dasuki na. I pray this interpretation is false o.

Stanleyelege:
No vex. But that is the true state of our economy.

I budgeted 1.6 m but i ended up paying 3.2 million.

Dont think of going back. 2 years from now, u will forever cherish the decision u ve just taken.

Please is this estimate just the tuition fee or it covers living costs?

ukchy:
Hi dear,
Just saw your messages on my mail i try responding but it didn't deliver

Yes am in CQU Brisbane doing my final term Master of Professional Accounting
How may I be of help to you?

I have sent you pm about three times, please reply.

Observant:
Why is no one talking about this sponsorship and finance ishh.

I am waiting for my admission but I would like understand this financial is. Has anyone applied under this new ssvf?

What program and school,bro?

Raymondeji:
Ok, now I understand. I had to take that risk. Due to the new policy they started in July, I didn't want any issues regarding account statement or tax records. and my agent also adviced me to submit to avoid any issues. My application was SVP and I had all my documents complete. What do you think can happen now? Or what can I do?

I think you should just pray that they deem your application eligible for SVP consideration. I am also an intending applicant, going in February too.

Raymondeji:
You don't seem to understand. I have already applied. I just hope its not too soon tho.

I diplomatically told you that your application was too early.

marshalcarter:
All dis ppl wey write 1 single letter.....shey una blow weed

1 and single?

Please who's going to Perth in February?

Raymondeji:
Goodday guys, I just want to understand some things. First of all I'm not in a hurry. I submitted my application on 17th of June SVP class (though I included my acc statement). I got a mail after that from teleperformance 2 days after acknowledging the reciept of the application. My resumption is still in Feb, 2017. But I submitted the application to escape the new SSVP ish. Now I want to know, should I can contact them if don't hear from them soon? I have no reason to rush. But SVP class should not take more than 8 weeks at most. Can I contact them after then?

If I'm right, you can lodge your application with DIBP within 120days prior to the start of your course(s) and migrate within 90 days of the same. Just check their site.

Solitin40:
What of student that is just 18 years old my mom is the other that pay direct tax because she works with the federal government but dad that is the main sponsor doesn't pay tax this new July 1 law is a big WAHALA O

I think that the first option is easier, esp when you have a contact who's working full-time in Aussie

ukchy:
Save your money and go for PR, thank me later.
You can only think of applying to school if you dont have work experience .
Don't mind anybody advising you to abandon your accounting dream. Even though nursing is good accounting is a professional course and you have every opportunity to work anywhere.Just follow your dream .

Am currently doing my Master of Professional Acounting with CQU Brisbane

Thanks so much for your encouraging words. I'm glad that you're into what I am about to start. please, I've sent you a mail, kindly reply it, I want to extensively inquire from you. Thanks compatriot.

phemoinc:
What will I score

Guy, it's not funny. You have summed figures to 5 before you typed 2+2.