By Stephen Nakrosis
Moody’s Buyers Service mentioned Friday it was downgrading Nigeria’s native forex and international forex long-term issuer rankings to B3 from B2, and inserting them on evaluate for downgrade.
Moody’s additionally lowered its score on the nation’s international forex senior unsecured debt rankings to B3 from B2, equally inserting them on evaluate for downgrade.
The score downgrade is pushed by vital deterioration in authorities funds and its exterior place, Moody’s mentioned.
Nigeria, a member of the Group of the Oil Producing Nations, or OPEC, has been unable to learn from a powerful improve in worldwide crude-oil costs, Moody’s mentioned. In line with Moody’s, “the steep fall in oil manufacturing in 2022 and the extension of the costly oil subsidy have nearly solely eroded the enhance to authorities income and exports that will in any other case have been anticipated from greater oil costs.”
Moody’s additionally mentioned monetary and capital outflows from Nigeria are exceeding its present account surplus.
Additional, “the evaluate for downgrade is prompted by the danger that the continuing fiscal and exterior deterioration accelerates, weakening additional the federal government’s capability to service debt and thereby rising additional its threat of default,” Moody’s mentioned.
Write to Stephen Nakrosis at stephen.nakrosis@wsj.com