Fitch revises Nigeria's credit rating outlook to 'stable

Fitch Ratings, an international ratings agency providing issuer and bond ratings, on Friday, revised the outlook of Nigerias credit rating to stable from negative.Fitch said the revision was based on the likelihood of reforms to be carried out by the newly- appointed economic team of the Federal Government of Nigeria.It said, The rating is hinged on the strong economic team appointed by the government in the new democratic era. Also, the deterioration in reserves was halted, as the government adopted tighter monetary policy and some fiscal discipline.Fitch currently rates Nigeria at BB-minus. It had revised the outlook on that rating to negative about a year ago, as foreign reserves declined rapidly during three consecutive quarters.Fitch had lowered its sovereign credit outlook on Nigeria to negative from stable, citing the depletion of its windfall oil savings and heightened political uncertainty ahead of elections in April.The ratings agency said then that continued withdrawals from the excess crude account, into which Nigeria saves crude oil earnings above a benchmark price, and lower forex reserves were a threat to economic stability.Sovereign ratings analyst, Ms. Veronica Kalema, said, The depletion of the ECA and continued gradual fall in international reserves at a time of high oil prices and record high oil production is a major concern.Analysts had said the ratings of Fitch last year was unlikely to affect the pricing of Nigerias $500m debut global bond, which it issued to establish a benchmark in the international market. True to their prodiction, the rating did not affect the issue as it was oversubscribed.Standard & Poors Ratings Services, however, affirmed its B+ long-term rating on Nigeria with a stable outlook in November last year but has yet to rate the country this year.
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