S&P sees Nigeria’s 2029 investment-grade goal as unrealistic

Résumé détaillé

Finance Minister Taiwo Oyedele said last month the country wants to exit junk status by 2029 to attract more capital and deepen its markets.

Nigeria’s ambition to return to investment grade within the next three years may be overly optimistic, given how long similarly assessed sovereigns have historically taken to reach that level, according to S&P Global Ratings.

Finance Minister Taiwo Oyedele said last month the country wants to exit junk status by 2029 to attract more capital and deepen its markets.

Africa’s largest oil producer is rated at B, five notches below investment grade, by S&P with a stable outlook. Fitch Ratings also has it five steps into speculative territory, while Moody’s Ratings has it six levels below the threshold.

“We have never seen actually a sovereign go from a single B to investment grade in three years, historically,” Samira Mensah, managing director for research and analytics in Africa at S&P, said in an interview in Lagos, Nigeria’s commercial hub. “That is the track record that we have and we have a long track record of credit ratings up and down.”

S&P, which raised Nigeria’s credit rating for the first time since 2012 in May, citing economic reforms, higher oil prices and improved capacity to refine and export crude, is due to provide its next assessment on Friday.

Nigerian President Bola Tinubu has been in office for more than three years and instituted reforms that include ending costly fuel subsidies, allowing the naira to trade more freely and overhauling the tax system to strengthen public finances.

Mensah also said that while S&P commends authorities for setting an ambitious ratings target, the focus should be on “progressing in the right direction rather than aiming for a specific rating.”

Finance Minister Taiwo Oyedele said last month the country wants to exit junk status by 2029 to attract more capital and deepen its markets.

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