Federal Republic of Nigeria
Fitch Ratings Ltd. downgraded the outlook on Nigeria’s credit assessment to negative because of concerns that foreign currency shortages will constrain the non-oil economy. Fitch puts the nation’s debt is rated B+, four steps below investment grade.
“Access to foreign exchange will remain severely restricted until the Central Bank of Nigeria can establish the credibility of the interbank foreign-exchange market and bring down the spread between the official rate and the parallel market rates,” Fitch said in a statement on Wednesday.
Nigeria is a fast growing country. Its economy is the largest in Africa, and its population is expected to grow 2.7% till 2045.
However, since the election of President Muhammadu Buhari a militant group called the Niger Delta has disrupted the country's 2.4 million b/d of production by blowing up pipelines, hassling producers, and threatening to destroy additional oil producing facilities. As a result, Nigeria's oil production fell from 2.4 million b/d to 1.4 million b/d putting pressuring a growing nation more and more reliant on its oil as revenue.
Production has since recovered by ~500m b/d but the conflict is ongoing and Nigeria’s economy may struggle to rebound from its worst slump in 25 years unless President Muhammadu Buhari can end the conflict in the nation’s oil-producing region.
Sources suggest a dialog has been opened between the President and Rebel Forces.
A previous wave of militancy ended with an amnesty in 2009.