Standards and Poor’s downgrades Nigeria’s economy

The Standard and Poor's Corp. sign is displayed outside of the

By Musa Isah

Standards and Poor’s (S&P) an International rating Agency said that ​the Nigerian government fiscal policies in response to fall in global oil price were “proactive and ambitious”.

This was disclosed in a statement Paul Nwabuikwu, spokesperson to the Minister of Finance, Ngozi Okonjo-Iweala, in Abuja.

It said that the rating organisation in its latest rating of Nigeria’s economy downgraded it from BB- to B+.

The downgrading was attributed to the decline in oil price in the seven months which affected external position and external vulnerability of the country.

It, however, identified the coming general elections and the potential under performance ​i​n oil production as possible negative factors.

“Nigeria is one of many oil producing countries downgraded by S&P due to the impact of the steep drop in global oil prices on their economies,” it said.

It further noted that it based its decision on significant political risk arising from the coming elections as well as the impact of insurgency in the North East.

The Agency put annual real GDP growth of the country at five per cent​ of ​the fall in oil prices.

“This is slightly higher than the 4.8 per cent projected by the IMF and is quite robust by current global standards,” it said.

According to the statement, the GDP growth is being driven by the non-oil sectors of the economy.

Other countries downgraded by the agency are Russia, Bahrain, Congo (Brazzaville), Kazakhstan, Oman, Venezuela, Angola and Gabon.

It also assigned a negative outlook to Azerbaijan and Saudi Arabia.

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