Economy
S&P Assigns ‘B/B’ to Nigeria with Outlook Stable
By Modupe Gbadeyanka
One of the leading rating agencies in the world, S&P Global Ratings, has affirmed its ‘B/B’ long- and short-term sovereign credit ratings on Nigeria with a stable outlook.
At the same time, it affirmed its long- and short-term Nigeria national scale ratings at ‘ngBBB/ngA-2’.
S&P Global Ratings said the ratings on Nigeria are constrained by its low level of economic wealth, real GDP per capita trend growth rates below those of peers with similar levels of development, and future policy responses that may be difficult to predict because of the highly centralized political environment.
The ratings are supported by relatively low general government debt and modest fiscal deficits, it said.
In a statement, S&P Global Ratings said it expects Nigeria’s economy to achieve real GDP growth of 1.5 percent in 2017 and 3.4 percent on average over 2017-2020, supported by improvements in the oil sector and improved government budget execution under its recently released Economic Recovery and Growth Plan 2017-2020.
It further said a gradual increase in foreign currency inflows through rising export revenues and government external borrowing could help reduce foreign currency shortages in the non-oil sector and allow industry and financial sectors more leeway to contribute to economic growth.
Nevertheless, on a per-capita basis, real GDP trend growth of 0.4 percent (which we proxy by using 10-year weighted-average growth) remains below that of peers with similar wealth levels. Nigeria has significant infrastructure and energy shortfalls and low income levels, with GDP per capita at $1,800 in 2017.
Nigeria is a sizable producer of hydrocarbons. The oil sector’s direct share of nominal GDP is officially estimated at about 10 percent, while oil and gas account for over 90 percent of exports and at least half of fiscal revenues.
“Although oil revenues support the economy when prices are high, we view them as exposing Nigeria to significant volatility in terms of trade and the government to swings in the revenue base,” it said.
Oil’s relatively small contribution to GDP results from the country’s large and growing population, estimated at about 192 million people in 2017, which has resulted in the emergence of other large sectors, such as agriculture (22% of GDP), trade (18%), and information and communication (12%).
Nevertheless, the oil sector has a significant indirect impact on the economy. A marked contraction in oil production, slower implementation of fiscal policy, and a restrictive exchange-rate regime
resulted in Nigeria’s economy contracting, in real terms, by 1.5% of GDP in 2016. Since then, oil production has increased back above 2 million barrels per day (bpd) in early 2017 (against the about 1.6 million bpd reported at times in the second half of 2016).
Oil production has been supported by reduced incidents of sabotage in the Niger Delta as the government’s engagement with community leaders appears to have borne fruit, while repairs are being completed on key export pipelines.
“We have marginally increased our oil price assumptions (see “S&P Global Ratings Raises Its Oil And Natural Gas Prices Assumptions For 2017,” published Dec. 14, 2016, on RatingsDirect) to an average US$53 per barrel (/bbl) over 2017-2020, compared with US$51/bbl at the time of our previous review in September 2016 (see “Federal Republic of Nigeria Ratings Lowered To ‘B/B’ On Weak Growth Dynamics; Outlook Stable,”),” S&P Global Ratings said.
By Adedapo Adesanya
The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said ongoing reforms and strategic policy implementation in Nigeria’s petroleum sector are driving significant investments and strengthening the country’s position as a leading energy destination in Africa.
Mr Lokpobiri stated this at the Management Retreat of the Ministry of Petroleum Resources, where he stressed the need for improved institutional performance and accountability to sustain growth in the sector.
According to the Minister, the federal government has deliberately pursued far-reaching reforms aimed at creating a stable and investor-friendly environment capable of attracting local and foreign capital into the oil and gas industry.
“From far-reaching institutional reforms to the effective implementation of strategic policies, we have remained committed to carrying all stakeholders along, fostering a conducive environment for investments to flourish,” Mr Lokpobiri said.
“As a result, our petroleum sector has witnessed significant investments that continue to strengthen Nigeria’s position as a leading energy destination.”
The Minister noted that the gains recorded in the sector were the product of collective efforts across the Ministry and its agencies, commending staff for their dedication and professionalism.
“The Management Retreat of the Ministry of Petroleum Resources provided an important platform to reiterate that these accomplishments would not have been possible without the collective dedication, professionalism and teamwork of every staff member across the Ministry and its agencies,” he stated.
Mr Lokpobiri said the retreat, themed Driving Institutional Performance and Accountability in the Petroleum Sector for Sustainable National Development, underscored the importance of continuous improvement in service delivery and operational efficiency.
Drawing lessons from the theme, he urged officials of the Ministry and regulatory agencies to intensify efforts toward enhancing institutional effectiveness and strengthening governance frameworks.
“I encouraged that we must redouble our efforts, continuously improve the quality of our services, and strengthen institutional performance,” he said.
The Minister further emphasised the continued relevance of fossil fuels in the global energy mix, stressing that Nigeria must leverage its hydrocarbon resources to drive economic growth while ensuring citizens benefit from ongoing reforms.
“With fossil fuel as the dominant source of energy, we must ensure that Nigerians experience the benefits of our progress and that Nigeria remains the preferred investment destination in Africa and a globally competitive hub for energy investments,” Mr Lokpobiri added.
By Aduragbemi Omiyale
The N3.2 billion rights issue of Universal Insurance Plc has been extended by almost two weeks after securing regulatory approval.
The exercise was earlier scheduled to close on June 10, 2026, but will now close on Monday, June 22, 2026.
The extension was granted by the Securities and Exchange Commission (SEC) after a request from the underwriting organisation.
In the rights issue, Universal Insurance is offering to shareholders 2,666,666,667 ordinary shares of 50 Kobo each at N1.20 per share on the basis of one new ordinary share for every existing six ordinary shares held as of the close of business on Monday, March 30, 2026.
Subscription for the acquisition of the company’s extra shares opened on Wednesday, May 13, 2026.
The extension gives investors more time to increase their stake in the insurance firm, which intends to use proceeds from the exercise to boost its capital base, as mandated by the National Insurance Commission (NAICOM).
Insurance companies operating in Nigeria have been given till July 31, 2026, to shore up their capital base or pack up. Operators can also explore a merger if they wish.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited opened its doors to market participants in four days last week as a result of a public holiday observed on Friday, June 12, for 2026 Democracy Day in the country.
In the week, investors bought and sold 4.964 billion shares worth N207.521 billion in 235,966 deals, as against the 3.966 billion shares valued at N175.659 billion that exchanged hands in 343,587 deals a week earlier.
Analysis showed that the financial services industry led the activity chart with 4.116 billion shares valued at N84.607 billion in 96,165 deals, contributing 82.92 per cent and 40.77 per cent to the total trading volume and value, respectively.
The services sector transacted 232.479 million shares worth N4.955 billion in 17,614 deals, while the industrial goods segment exchanged 144.988 million shares worth N39.077 billion in 24,775 deals.
Sterling Holdings, FCMB, and Access Holdings were the most traded stocks with 2.883 billion units sold for N36.188 billion in 15,533 deals, accounting for 58.09 per cent and 17.44 per cent of the total trading volume and value, respectively.
A total of 40 equities appreciated in the week versus 23 equities in the previous week, 53 equities depreciated versus 65 equities a week earlier, and 53 equities remained unchanged versus 58 equities in the preceding week.
ABC Transport was the best-performing equity for the week after it gained 25.60 per cent to trade at N7.80, Consolidated Hallmark appreciated by 23.13 per cent to N8.25, Abbey Mortgage Bank rose by 21.93 per cent to N11.40, Infinity Trust Mortgage Bank grew by 20.32 per cent to N11.25, and Austin Laz soared by 15.16 per cent to N4.33.
The worst-performing equity last week was Fidson Healthcare because of its 25.86 per cent loss, closing at N101.20. Neimeth declined by 19.14 per cent to N8.55, Union Homes REIT shed 17.36 per cent to close at N70.00, SUNU Assurances slipped by 11.38 per cent to N3.97, and Unilever Nigeria dropped 10.26 per cent to trade at N140.00.
As for the index movement, the All-Share Index (ASI) and the market capitalisation chalked up 0.88 per cent each to settle at 244,738.74 points and N156.970 trillion, respectively.
Similarly, all other indices finished higher apart from the pension, AFR Bank Value, MERI Growth, MERI Value, consumer goods, Lotus II, industrial goods, sovereign bond and commodity indices, which fell by 0.03 per cent, 1.20 per cent, 0.21 per cent, 1.61 per cent, 0.54 per cent, 0.51 per cent, 1.00 per cent, 2.04 per cent and 0.34 per cent, respectively.
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