Standards and Poor’s (S&P) an International rating Agency on Friday said that ​the Nigerian government fiscal policies in response to fall in global oil price were “proactive and ambitious”.
This was disclosed in a statement Paul Nwabuikwu, spokesperson to the Minister of Finance, Ngozi Okonjo-Iweala, in Abuja.
It said that the rating organisation in its latest rating of Nigeria’s economy downgraded it from BB- to B+.
The downgrading was attributed to the decline in oil price in the seven months which affected external position and external vulnerability of the country.
It, however, identified the coming general elections and the potential under performance
​i​n oil production as possible negative factors.
“Nigeria is one of many oil producing countries downgraded by S&P due to the impact of the steep drop in global oil prices on their economies,” it said.
It further noted that it based its decision on significant political risk arising from the coming elections as well as the impact of insurgency in the North East.
The Agency put annual real GDP growth of the country at five per cent
​ of ​the fall in oil prices.
“This is slightly higher than the 4.8 per cent projected by the IMF and is quite robust by current global standards,” it said.
According to the statement, the GDP growth is being driven by the non-oil sectors of the economy.

Source: http://www.premiumtimesng.com/business/178887-standards-and-poors-d%E2%80%8Bowngrades-%E2%80%8Bnigerias-economy.html

Another 'fresh air' milestone delivered by this incompetent outgoing administration.

Jonathan was in charge of this country when oil prices rose to record levels with Nigeria making huge foreign earnings from the sale of crude oil. He presided over the callous mismanagement of these earnings, with massive corruption and embezzlement in all ministries and parastatals under his command. He enriched himself at the expense of the Nigerian public and their generations unborn.

In saner climes, he would have honorably resigned and voluntarily handed himself to the police for investigation and prosecution. Yet he wants to rule over this country for another 4 years.

Not just Nigeria.

All oil producing countries under their radar was downgraded too ; Russia ,Angola,Venezuela etc.

Its expected, due to the current volatility in the crude oil market ,added to the fact that the dollar got stronger.

Kagame:
Not just Nigeria.

All oil producing countries under their radar was downgraded too ; Russia ,Angola,Venezuela etc.

Its expected, due to the current volatility in the crude oil market ,added to the fact that the dollar got stronger.

That is false.

S & P assesses all countries, so there is nothing like specific countries 'under their radar'.

How can he be claiming to transform this country if it is not reflected in the effective economic management of the nation. How come countries like Qatar, UAE, Ecuador were not downgraded?

Enough of the excuses!

Lalasticlala, S and P downgrades the Nigerian economy- Again!

Collynzo419:


That is false.

S & P assesses all countries, so there is nothing like specific countries 'under their radar'.

How can he be claiming to transform this country if it is not reflected in the effective economic management of the nation. How come countries like Qatar, UAE, Ecuador were not downgraded?

Enough of the excuses!

Lalasticlala, S and P downgrades the Nigerian economy- Again!

Olodo!

You think S &P rating is a free service? Boy ,you have to subscribe before you can be rated!

And now listen again,almost all oil producing countries were downgraded , Saudi Arabia inclusive.

Am not talking politics,am talking economics.

Kagame:

Olodo!
You think S &P rating is a free service? Boy ,you have to subscribe before you can be rated!
And now listen again,almost all oil producing countries were downgraded , Saudi Arabia inclusive.
Am not talking politics,am talking economics.

Well you are not informed. You need to read more.

S & P and other rating agencies do not rate countries based on the subscription of the nations , their economic and financial analysis/projections is essentially for the consumption of creditors and investors. A country's rating allows investors to carry out a risk assessment of the particular sovereign state.

I have mentioned 3 oil producing nations that were not downgraded- Qatar, UAE, Ecuador among others. What are they doing differently? Why is their case different?

Why is the country highly dependent on oil revenue even when this outgoing government is claiming to have diversified the economy?

n

Collynzo419:


Well you are not informed. You need to read more.

S & P and other rating agencies do not rate countries based on the subscription of the nations , their economic and financial analysis/projections is essentially for the consumption of creditors and investors. A country's rating allows investors to carry out a risk assessment of the particular sovereign state.

I have mentioned 3 oil producing nations that were not downgraded- Qatar, UAE, Ecuador among others. What are they doing differently? Why is their case different?

Why is the country highly dependent on oil revenue even when this outgoing government is claiming to have diversified the economy?

Bro,you have to request for a rating before you can be rated.

Some countries are graded as NR (Not rated) ,what does that mean ? It means the country has not requested to be rated or there could be insufficient information to carry out a rating.

Countries like libya and mali have no rating,even Namibia and a host of others.

Bros its not all about politics,most oil producing countries are affected by the downgrade.

Kagame:


Bro,you have to request for a rating before you can be rated.

Some countries are graded as NR (Not rated) ,what does that mean ? It means the country has not requested to be rated or there could be insufficient information to carry out a rating.

Countries like libya and mali have no rating,even Namibia and a host of others.

Bros its not all about politics,most oil producing countries are affected by the downgrade.

Bro, the fact that countries have to make request to be rated is largely immaterial.

The reality is Nigeria has obviously requested to be rated by these agencies and there is a financial and economic reason for this; the ability to raise funds/capital internationally. The fact is this- Nigeria has been downgraded, you cannot argue that since most oil producing nations have been downgraded then it is not problematic. I have given examples of oil-producing countries that have not been downgraded and are rated by S & P.

Ecuador has a rating of B+ (remains unchanged)

Qatar has a rating of AA

UAE has a rating of Aaa (Moodys)

In addition, there are several other oil producing countries unaffected by this downgrade exercise by S and P. Examples are:

1. Kuwait- AA

2. China- AA-

3. Mexico- A

4. Brazil- BB

and most importantly 5. Egypt, a country facing far more political challenges than Nigeria and yet was not downgraded.

In sum, why was Nigeria part of the cohort downgraded? Where did we go wrong?

Collynzo419:


Bro, the fact that countries have to make request to be rated is largely immaterial.

The reality is Nigeria has obviously requested to be rated by these agencies and there is a financial and economic reason for this; the ability to raise funds/capital internationally. The fact is this- Nigeria has been downgraded, you cannot argue that since most oil producing nations have been downgraded then it is not problematic. I have given examples of oil-producing countries that have not been downgraded and are rated by S & P.

Ecuador has a rating of B+ (remains unchanged)

Qatar has a rating of AA

UAE has a rating of Aaa (Moodys)

In addition, there are several other oil producing countries unaffected by this downgrade exercise by S and P. Examples are:

1. Kuwait- AA

2. China- AA-

3. Mexico- A

4. Brazil- BB

and most importantly 5. Egypt, a country facing far more political challenges than Nigeria and yet was not downgraded.

In sum, why was Nigeria part of the cohort downgraded? Where did we go wrong?

The answer to your question is simple.

Nigeria is a mono-economy and vey vulnerable to dutch disease.Partly the same situation with other downgraded countries.

The present goverment has taken some bold steps to diversify the economy,but these steps take time to come good.Some have produced quick wins and instant results;its not a days job basically.

I agree that the government should have had enough fiscal buffers to withstand price shocks in the oil market,but thats a story for another day.

Collynzo419:


That is false.

S & P assesses all countries, so there is nothing like specific countries 'under their radar'.

How can he be claiming to transform this country if it is not reflected in the effective economic management of the nation. How come countries like Qatar, UAE, Ecuador were not downgraded?

Enough of the excuses!

Lalasticlala, S and P downgrades the Nigerian economy- Again!

When Buhari becomes president (future impossible tense), he will raise global oil prices' - low and behold, all Nigeria's economic woes will be gone within three months.

Simple Economics.

A testament to gej failure, a failed president on a downward spiral to otueke

Ngwakwe:


When Buhari becomes president, he will raise global oil prices' - lo and behold, all Nigeria's economic woes will be gone within three months.

Simple Economics.

Nope, u should learn to pay attention and not behave like jogogoro,

Buhari will deal squarely will theft of oil, this will send a strong messsage to investors that nigeria us capable of securing their investment, hence investors confidence will increase our ratings will improve, nigeria oil export will rise and more money to the coffers. Hope u get it.

Kagame:


The answer to your question is simple.

Nigeria is a mono-economy and vey vulnerable to dutch disease.Partly the same situation with other downgraded countries.

The present goverment has taken some bold steps to diversify the economy,but these steps take time to come good.Some have produced quick wins and instant results;its not a days job basically.

I agree that the government should have had enough fiscal buffers to withstand price shocks in the oil market,but thats a story for another day.

I respect the civility in which you responded to my questions but I respectfully disagree.

This administration has severally claimed that they would diversify the Nigerian economy , turning it from a mono-economy highly dependent on oil revenues. In fact, they have used the diversification line as a campaign tool claiming that Nigeria has turned the corner.

-This was a promise by GEJ in 2013 to diversify the economy

http://www.punchng.com/editorials/jonathans-economic-diversification-statement/

- In 2014, he also promised to diversify the economy

http://www.informationng.com/2014/12/falling-oil-prices-jonathan-calls-for-diversification-of-nigerias-economy-says-agric-sector-remains-vital.html

-We are now in 2015, end of first quarter and yet more promises.

http://leadership.ng/business/399144/oil-prices-shall-diversify-economy-2015-jonathan

I might come across as a cynic but once beaten, twice shy as they say. But as of February 2015, Nigeria still earns 90% of its export earnings and 70% of government revenue:

http://www.bloomberg.com/news/articles/2015-02-18/nigeria-central-bank-shuts-auction-window-as-naira-rates-widen

Like I said earlier, the Jonathan government was lucky to inherit a budget surplus and a robust forex reserve. That position is now history because of misappropriation of funds + inefficient financial and budgetary misallocation.

Someone has to take the blame and it is the President and C-in-C.

Ngwakwe:


When Buhari becomes president (future impossible tense), he will raise global oil prices' - low and behold, all Nigeria's economic woes will be gone within three months.

Simple Economics.

No sir.

You cannot make such a simplistic statement. Buhari has always insisted that plugging holes in corrupt practices will lead to savings. That is a valid position sir.

Transparecy International (as of 2012) estimates that corruption in the oil industry alone has cost Nigeria $35 b

http://www.transparency.org.uk/corruption/statistics-and-quotes/the-cost-to-business

Alajazera estimates $100b since 2008

Disturbingly, UPI estimates that Nigeria looses $1 billion a month to corruption in the oil industry

http://www.upi.com/Business_News/Energy-Resources/2012/10/25/Nigeria-loses-billions-in-oil-gas-theft/77851351181960/

I agree with General Buhari that nipping those corruption loopholes in the bud will save Nigeria a lot of money that can be used in more ethical ways for national development.

The outgoing administration has failed in curtailing corrupt practices, in fact they have encouraged it. It will stop from May 28 sir

Lalasticlala

vedaxcool:


Nope, u should learn to pay attention and not behave like jogogoro,

Buhari will deal squarely will theft of oil, this will send a strong messsage to investors that nigeria us capable of securing their investment, hence investors confidence will increase our ratings will improve, nigeria oil export will rise and more money to the coffers. Hope u get it.

Nigeria as OPEC member has a quota and as we speak, we are not producing less. We even have less buyers and most of our vessels stay for days before sales until/unless we grant discount.

Stopping Oil theft which Bihari can't completely eliminate notwithstanding is not a license to maneuver 2.6billion barrels per day OPEC quota.

vedaxcool:


Nope, u should learn to pay attention and not behave like jogogoro,

Buhari will deal squarely will theft of oil, this will send a strong messsage to investors that nigeria us capable of securing their investment, hence investors confidence will increase our ratings will improve, nigeria oil export will rise and more money to the coffers. Hope u get it.

Investors confidence or ability to service our debts?

It's all about surplus and foreign exchange which is now fast dwindling because of fall in oil price and our much dependent on oil.

Jonathan will do a better job diversifying our economy than Buhari.

Kagame:


Olodo!

You think S &P rating is a free service? Boy ,you have to subscribe before you can be rated!

And now listen again,almost all oil producing countries were downgraded , Saudi Arabia inclusive.

Am not talking politics,am talking economics.

Do you know that Norway is an oil producing country with AAA rating -Stable-better than US rating? Are u aware that Saudi saved over $800bn? Are u aware that Algeria saved over $200bn from oil sales? That's over 100% of its GDP? Russia saved over $500bn-25% of its GDP? Angola saved about $35bn -about 33% of its GDP? And Nigeria saved in. 6 yrs, $0=0.0000% of its GDP?