Moody’s global rating agency has raised concerns over Nigeria’s Forex scarcity in the midst of rising inflation that might increase further.
In a note monitored via the Thomson Reuters Eikon, Moody’s noted that it projects stagnation in real GDP in 2016 and only subdued growth at 2.5% in 2017 “We expect that Nigeria will contain pressures on its public finances in the short term” the statement said.
The agency noted that there is a greater doubt about severity of impact of challenges, particularly on government liquidity and economic growth, over medium term.
It also projects inflation to “to accelerate to 18% by year’s end, before falling to an average of 12.5% in 2017. Moody’s said it views the recent devaluation of the Naira as credit positive.
However the the depreciation will increase Nigeria’s external debt marginally to 5.2% of GDP by end-2016 from 3.3% in 2015
As a cautionary note, Moody’s says it expects fiscal outlook to remain in deficit at around 3.7% of GDP in 2016, after posting a 3.8% deficit in 2015.