‘Owing to a marked contraction in oil production, a restrictive foreign exchange policy and delayed fiscal stimulus’ – S&P. Paul Wallace and Emele Onu, Bloomberg | 18 September 2016 22:15 S&P Global Ratings downgraded Nigeria further into junk territory just as Africa’s most populous nation prepares to issue its first Eurobond since 2013, amid low oil prices and severe shortages of foreign exchange. S&P lowered Nigeria’s rating one level to B, five levels below investment grade and in line with Kyrgyzstan and Angola. The outlook was changed from negative to stable. “Nigeria’s economy has weakened more than we expected owing to a marked contraction in oil production, a restrictive foreign exchange policy and delayed fiscal stimulus,” S&P said Friday in an e-mailed statement after markets closed. While government debt remains low, “servicing costs as a percentage of general government revenues are high and rising,” the company said. The rating cut comes as Nigeria prepares to issue a dollar bond before the end of the year. The Debt Management Office asked banks wanting to manage a $ 1 billion deal to place bids by Sept. 19. Yields on the nation’s $500 million of securities due in July 2023 have fallen almost 280 basis points to 6.63 percent since peaking at 9.4 percent on Jan. 18. The bonds have returned 14 percent this year, compared with the average of 16 percent for Sub-Saharan African sovereign dollar debt, according to Bloomberg indexes. “The deterioration of the Nigerian credit has been going on for years,” Jan Dehn, head of research at Ashmore Group Plc., which manages about $53 billion of emerging market assets, said by phone from London. The country needs to show progress opening its markets and letting its currency, the naira, trade freely, he said. The downgrade is the latest blow to the economy, which shrank in the last two quarters and is headed for its first full-year recession since 1991, according to the International Monetary Fund. While President Muhammadu Buhari’s government announced a record budget for 2016 to stimulate the economy, it is struggling to finance infrastructure projects, as well as pay civil servants’ salaries.

papaejima1:
chai buhari

Jirate:


And the Olodo is Failing and Smiling……, Abacha was even better.

idupaul:


Despite sanctions and low oil prices Abacha grew the economy 4% steady every year and the naira never slid against the dollar at all. Compared to Buhari Abacha was a genius.

idupaul:


Despite sanctions and low oil prices Abacha grew the economy 4% steady every year and the naira never slid against the dollar at all. Compared to Buhari Abacha was a genius.