Fitch says Nigeria’s transition smooth but creates policy uncertainty

Fitch Ratings said on Thursday that the prospect of a smooth transfer of power in Nigeria alters but does not remove risks to the country’s sovereign credit profile related to March’s elections.

The rating agency said that a change of government introduces economic policy uncertainty following smooth elections and the authorities’ proactive response to lower oil prices this year.

Gen. Muhammadu Buhari of the All Progressives Congress (APC) will succeed incumbent President Goodluck Jonathan on May 29, Polling last month was peaceful despite a six-week delay. President Jonathan conceded defeat, which appears to have reduced the risk of public disturbances. The APC also secured a resounding victory in the elections for state governors held on April 11.

Fitch said the first transition from an elected ruling party to an opposition party, via a smoother and more credible electoral process than was widely expected, is positive for Nigeria and suggests that the country’s democratic institutions are getting stronger (governance indicators are much weaker than the ‘BB’