Standard & Poors Rating agency said it is affirming Nigeria’s sovereign affirmed at ‘B/B’; outlook stable.
The rating agency said Nigeria’s stable outlook signals assessment that oil sector improvements will support higher economic growth, fiscal revenues, among other things.
Nigeria’s stable outlook signals assessment that oil sector improvements will also support higher current account receipts over next 12 months.
The country’s saw improvements in 2017 with higher oil production will help increase foreign currency supply, keep current account in balance.
S&P said ratings on Nigeria constrained by the view of the low level of economic wealth, weak external position, among other things.
The agency noted that ratings on Nigeria also constrained by view of real GDP per capita trend growth rates below those of peers with similar levels of development, and future policy responses that may be difficult to predict.
However, the agency said Nigeria still see sporadic attacks in northeast owing to Boko Haram, as well as risk of another escalation of tensions in the Niger Delta.
Nigeria is Africa’s largest economy by gross domestic product but second to South Africa, the continent’s third largest economy in terms of development and market depth.
The country’s economy virtually depends on oil revenue for 0ver 70% of its budget funding, a volatile sector that led to a first in 20 years’ recession that just ended last week since the first quarter of 2016.