By Adedapo Adesanya
Nigeria’s positive economic policy developments in the last couple of months have attracted the attention of one of the world’s leading ratings agency, Standard and Poor’s, stylised as S&P.
One of S&P Global’s top sovereign rating analysts, Mr Gill, said that Nigeria, Africa’s largest economy as well as Kenya were seeing positive responses but added that South Africa was a slow-moving story of steadily rising debt to GDP.
Nigeria is a country that S&P is now “watching closely,” Mr Gill said at the firm’s emerging market conference in London, the United Kingdom, on Tuesday.
“It’s on a negative outlook, but we are seeing some positive signs there,” he said.
He highlighted the government’s recent cuts to fuel subsidies and moves to drastically simplify and unify the country’s various foreign exchange rates.
In February, S&P affirmed Nigeria’s credit rating at “B-/B” but changed its outlook to “negative” – which is more or less like a downgrade warning.
The firm cited increasing risks over debt servicing capacity for the one-to-two years.
According to Reuters, Mr Gill did not elaborate on whether S&P was looking to revise its outlook in its next review of Nigeria on August 4.
President Bola Tinubu’s economic plan, which included the elimination of costly fuel subsidies, has freed up Nigeria’s commitment to dip into its lean pocket to be able to provide cheaper fuel, albeit to the detriment of many Nigerians, but the federal government has promised to divert the money to a more important aspect of the economy like health, education, and infrastructure.
He has also come up with several leadership reshuffles at the Central Bank of Nigeria (CBN), the Economic and Financial Crimes Commission (EFCC), as well as a host of other agencies and boards and also floated the weakening Naira while reversing some policies of his predecessor, Mr Muhammadu Buhari.
According to Goldman Sachs last month, Nigeria’s investment appeal depends on a complete elimination of currency controls.
