Despite Fitch Ratings according Nigeria a B+ rating, mainly based on currency repatriation from Nigerians in diaspora, it says the country still records negative outlook on foreign exchange management.
The periodical cumulative ratio on foreign currency, in relation to local demand, referred to as Foreign-Currency Issuer Default Rating (IDR), has not shown any sign of sustainable improvement in the past two years in the country, FItch in its report released on Wednesday stated.
It indicated that Nigeria’s economic policy, which was believed to be heading towards expectation of positive impact on the credit performance of most sectors, including manufacturing sector, for the short-term goal to look attractive, needs some more push.
“The rating is more sensitive to changes in Nigeria’s Long-Term Foreign-Currency IDR beginning from January 24, 2017, which has a net currency performance ratio that indicated growth improvement on the economy that was slowed down by recession of the year before (2016),” it said.
Fitch further stated that it was assigning Nigeria’s “upcoming United States dollar-based denominated IDR to senior unsecured bonds, which has placed the country on an expected rating of B+(EXP).”
The assignment of the final rating is believed to be based on the receipt of final documents materially conforming to information already reviewed and which portrayed Nigeria’s economy as being tailored towards path of improvement from money sent from its citizens abroad.
It said the key rating drivers are expected to push up the exercise, in line with Nigeria’s long-term receipt of aggregate growth index.
However, all the ratings by other agencies, including Moody, have equally indicated that the current outlook of Nigeria’s IDR from the long-term feature may wear bright look different from its current stage.
Fitch has also stated that the long-term local-currency IDR of Nigeria is associated with bearing negative signs, which could still place the country on a tight rope, capable of delaying quicker economic recovery.