Reviews & Outlooks | |
Reviews & Outlooks | |
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Thursday, July 09,
2020 / 07:28 PM / by Moody's Investors Service/ Header Image
Credit: The ALT Network/Ecographics
Moody's Investors Service ("Moody's")
reviews all of its ratings periodically in accordance with regulations - either annually or, in the case of governments and certain EU-based
supranational organisations, semi-annually. This periodic review is unrelated
to the requirement to specify calendar dates on which EU and certain other
sovereign and sub-sovereign rating actions may take place.
Moody's conducts these periodic reviews through
portfolio reviews in which Moody's reassesses the appropriateness of each
outstanding rating in the context of the relevant principal methodology(ies),
recent developments, and a comparison of the financial and operating profile to
similarly rated peers. Since 1st January 2019, Moody's issues a press release
following each periodic review announcing its completion.
Moody's has now completed the periodic review of a
group of issuers that includes Nigeria and may include related ratings. The
review did not involve a rating committee, and this publication does not
announce a credit rating action and is not an indication of whether or not a
credit rating action is likely in the near future; credit ratings and/or
outlook status cannot be changed in a portfolio review and hence are not
impacted by this announcement.
The credit profile of Nigeria (issuer rating B2)
reflects "ba2" economic strength, supported by the country's
substantial oil and gas endowment and long-term growth prospects, though
constrained by very low GDP per capita; "caa3" institutions and
governance strength, with very weak institutional capacity, high levels of
corruption, and very poor policy effectiveness; "ba1" fiscal
strength, with low levels of public debt but a high interest payments to
revenue ratio explained by an underdeveloped revenue base, itself over-reliant
on hydrocarbon revenues; and "ba" susceptibility to event risk driven
by political risk, due to a fractious political landscape, militancy in the
Niger Delta, and violence in the north-east that aggravates income inequality.
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