Agusto & Co., Nigeria’s foremost and pan-African rating agency, has assigned a foreign currency rating of “Bb” to the Federal Republic of Nigeria.
The rating is supported by strong non-oil sector growth, satisfactory gross external reserves, relative stability in the exchange rate on account of high crude oil prices in the international market and single-digit inflation. However, according to the rating agency, the security situation especially in the North-Eastern part of Nigeria on account of the terrorist group, Boko Haram, is affecting economic activities in the region.
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The huge infrastructure gap, including roads, railways and waterways, is also a medium to long term impediment to development and a rating constrain, the body said.
The power supply situation has not improved materially in several years, despite various initiatives. As a result, GDP growth has remained below potential. Reforms to address power shortages have commenced. If properly implemented, Agusto & Co believes the country’s chronic power shortages will be resolved.
The Central Bank of Nigeria’s (CBN) improved oversight has resulted in greater transparency, improved accountability, liquidity and the overall financial condition of the banking industry, it said.
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