Governor, Central Bank of Nigeria, Lamido Sanusi
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Nigeria’s credit rating was upgraded on Wednesday by Standard & Poor’s, a globally renowned ratings agency.
This follows the Central Bank of Nigeria’s drive for improved financial stability and the country’s optimism in the banking and electricity sector reforms.
Nigeria is among the world’s top 10 crude oil exporters and a key supplier to the United States, China and India. It is Africa’s second-largest economy after South Africa.
The ratings agency raised Nigeria’s long-term foreign and local currency sovereign credit rating to BB- with a stable outlook, three notches below investment grade, from B+, Reuters reported. This brings its view in line with Fitch’s rating.
The Punch had reported on Monday that Fitch Ratings, another international ratings firm, rated Nigeria BB-.
Analysts had noted that the ratings was not surprising and described it as familiar, especially when the CBN was implementing monetary tightening in the country.
Fellow ratings agency, Moody’s, expanded its coverage to include Nigeria on Wednesday, assigning a Ba3 rating with a stable outlook. Moody’s said it also expanded its coverage to Kenya and Zambia.
“(Nigeria’s) external reserve buffers have … been strengthening on the back of high oil prices and strong exports,” Standard and Poor’s said, in a statement.
“The government has sustained reform momentum in several key areas, including cutting the fuel subsidy and reforming the power sector, and the authorities have restructured and strengthened the previously troubled banking sector.”
Nigeria’s foreign exchange reserves have risen to around $42.7bn, up from around $33bn at the start of the year.
The Excess Crude Account, where it saves money it earns from oil exports over a benchmark prices, contains around $8.4bn, compared with $2bn at the end of 2010.
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Tight fiscal policy: S&P upgrades Nigeria’s credit rating