S&P down grades Nigeria credit rating due to poor debt-service capacity

Standard and Poor’s (S&P) has down graded Nigeria’s credit rating as a result of the increasing risk of the country’s poor capacity to service its debts in the next one-to-two years.

Standard and Poor  (S&P), on Friday “affirmed Nigeria’s credit rating at ‘’B-/B’’, but turned negative on its outlook. Other rating agencies, Moody’s and Fitch, lowered the country’s rating by one notch last year, S&P kept the rating at ‘B-/B’ with a stable outlook in 2022.

This downgrade is the second in 2023 after Moody’s agency downgraded the country to ‘Caa1’ from ‘B3’, owing to the deteriorating government’s fiscal and debt position.  

“S&P mentioned that Nigeria’s debt servicing capacity has weakened due to high fiscal deficits and increased external pressures. Analysts believe the multiple downgrades narrow Nigeria’s access to external funding and limit borrowing to only the domestic market. The dollar-denominated government bond should turn bearish in reaction to the S&P rating, seeing that Moody’s downgrade pulled down the market last week,” it said.