Government of Nigeria B3 RUR-: Update following rating downgrade to B3 and initiation of review for further downgrade

Government of Nigeria: Election disputes will delay policies to address Nigeria's pressing credit challenges - Issuer Comment – 2023/03/03 – US$ 200.00 – ...On 1 March, Nigeria's (Caa1 stable) electoral commission declared Bola Tinubu of the ruling All Progressives Congress (ACP) party the winner of presidential elections held on 25-26 February. President-elect Tinubu won 37% of the popular vote, while opponents Atiku Abubakar won 29% of the popular vote and Peter Obi won 25%. The losing candidates have contested the results amid media reports of technical problems, electoral fraud and voter intimidation. Legal challenges to the election outcome are credit negative because they may delay the formation of a functioning government that can address Nigeria's pressing credit challenges and could lead to social unrest. Had the election been undisputed, the earliest that Tinubu would have been sworn into office and formed a government would have been the end of May. But that timeline may now be significantly stretched. In the meantime, we project the fiscal deficit will continue to widen to 6.8% of GDP this year from 6% in 2022 - and well above the...

Government of Nigeria Caa1 stable: Update following downgrade to Caa1, outlook stable - Credit Opinion – 2023/01/27 – US$ 250.00 – ...Nigeria's credit profile reflects increasing debt service challenges. The government's small revenue base and very weak institutional and governance framework are long-standing, mutually self-reinforcing credit constraints. Against this background, monetary tightening and depressed domestic oil production have seen Nigeria's fiscal position deteriorate. We expect interest payments will consume about half of general government revenue in the medium term, from 35% in 2022. Credit strengths include the country's large and diversified economy, supported by strong domestic demand potential....

Moody's downgrades Nigeria's ratings to Caa1 with a stable outlook, concluding its review - Rating Action – 2023/01/27 – US$ 180.00 – ...Rating Action: Moody's downgrades Nigeria's ratings to Caa1 with a stable outlook, concluding its review...

Government of Nigeria - B3 review for downgrade: Annual credit analysis - Issuer In-Depth – 2022/12/14 – US$ 750.00 – ...The credit profile of Nigeria reflects very low government revenue, including from the oil sector, which is a key credit weakness. Authorities tightly regulate a large part of prices and broader operating conditions. The stakes are significant because of the otherwise huge potential related to the country's large natural or capital resource endowment. Nigeria's deep institutional weaknesses, including low revenue bases, have been mutually self-reinforcing. While not strictly constraining the country's economic development, the recent drop in oil production and global monetary tightening have magnified these issues. Nigeria's key metrics are favourable, with our forecast for government debt/GDP at only 35% as of year-end 2022. However, distorted prices often flatter these metrics and these metrics will deteriorate in line with negative "flow" data. At 35%, the share of general government revenue consumed by interest payments limits the sovereign's capacity to support the social and economic...

Government of Nigeria B3 RUR-: Update following methodology update - Credit Opinion – 2022/12/14 – US$ 250.00 – ...Nigeria's credit profile is constrained by fiscal and external reliance on the hydrocarbon sector, which has yielded relatively low revenue recently, the government's small revenue base, a very weak institutional and governance framework and a fractious political landscape. Credit strengths include the country's large and diversified economy, supported by strong domestic demand potential....

Moody's downgrades Nigeria's rating to B3 from B2 and places it on review for downgrade - Rating Action – 2022/10/21 – US$ 180.00 – ...Rating Action: Moody's downgrades Nigeria's rating to B3 from B2 and places it on review for downgrade...

Government of Nigeria: Nigerias plan to lengthen debt maturity may amount to a default under Moody's definition - Issuer Comment – 2022/10/17 – US$ 200.00 – ...Excludes government debt owed to the central bank Sources: Ministry of Finance of Nigeria and Moody's Investors Service...

Government of Nigeria: FAQ on Nigeria's fiscal and external position - Issuer In-Depth – 2022/09/07 – US$ 750.00 – ...As an oil exporter, Nigeria (B2 stable) is set to benefit from higher oil prices this year. However, its economic and financial performance have gradually deteriorated since the beginning of the year, as illustrated by subdued growth (+3.5% year-on-year over the first half of 2022), eroding foreign exchange reserves and downward pressure on the currency. In this report, we answer frequently asked questions about these developments. + Are higher oil prices exerting positive or negative pressure on the government's finances? So far, higher oil prices remain positive for Nigeria's fiscal accounts because revenue derived from oil production (2% of GDP in 2021) still outweighs the growing cost of the country's oil subsidy program (1% of GDP in 2021). However, constraints on oil production on the one hand and faster-growing oil consumption ¡ incentivized by the oil subsidy and inherent to the country's economic development ¡ on the other, have meant that the positive impact of higher oil prices...

Government of Nigeria B2 Stable: Update following change to forecasts - Credit Opinion – 2022/04/26 – US$ 250.00 – ...Nigeria's credit profile is constrained by fiscal and external reliance on the hydrocarbon sector, the government's small revenue base, a very weak institutional and governance framework and a fractious political landscape. Credit strengths include the country's large and diversified economy (hydrocarbons only represent 10% of GDP), supported by strong growth potential in domestic demand and deepening domestic capital markets....

Government of Nigeria: Decision to postpone removal of oil subsidies is credit negative - Issuer Comment – 2022/01/28 – US$ 200.00 – ...On 25 January, Nigeria's (B2 stable) Petroleum Minister Timipre Sylva announced that the government would postpone the removal of oil subsidies on imported fuel. The postponement is credit negative because the costly oil subsidies have historically been a key driver of Nigeria's significant fiscal deficits and accelerated deterioration in its public finances. The policy reversal also illustrates Nigeria's weak institutions and limited capacity to implement challenging reforms. The elimination of the oil subsidies has been envisaged for more than a decade by successive Nigerian administrations. This time, to further guarantee its implementation, the reform was put into law as a key provision of the long-awaited Petroleum Industry Bill, which was signed into law in August 2021. The government will therefore have to amend the law to reflect its decision to delay the removal of oil subsidies, and will have to propose a supplementary budget law that provides for the oil subsidies beyond June...