Fitch Ratings has downgraded Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B’ from ‘B+, citing the country’s precarious monetary and exchange rate policy setting and lack of fiscal buffers.
According to Fitch, the downgrade and Negative Outlook reflect the aggravation of ongoing pressures on Nigeria’s external finances following the recent slump in oil prices and the pandemic shock.
“Intensifying external pressures raise risks of disruptive macroeconomic adjustment given Nigeria’s precarious monetary and exchange rate policy setting and lack of fiscal buffers. The shock will also raise government debt and interest payment-to-revenue ratios from already particularly high levels and lead to a renewed economic recession,” Fitch further said in a statement issued Monday, 6 April 2020.
