The Finance Minister, Dr. Olusegun Aganga, was in pains the other day, trying to wish away the dire consequences of the recent downgrade of the nation’s sovereign credit rating by Fitch, an international rating agency headquartered in New York, US.
According to him, the latest international rating, which adjusts the country’s economic outlook downwards, was unduly punitive and unacceptable, given the positive features of the economy and the current administration’s ongoing reforms.
Fitch, in the rating, had cited the following as the major reasons for the revision of the nation’s outlook: the depletion of the Excess Crude Account (ECA); the decline in foreign exchange reserves; and their concern that the reform agenda of the current administration which they found to be very positive may not be implemented before the elections.
As a result of these, the rating agency then slammed BB-minus, three notches below investment grade, on Nigeria. It further assigned Nigeria’s Long-term foreign currency Issuer Default (IDR) ‘BB-’, Long-term local currency IDR ‘BB’, short term foreign currency IDR ‘B’ and Country Ceiling ‘BB-’.
Its sovereign ratings analyst,Veronica Kalema, gives much meat to the story: “The outlook revision reflects the weakening of the institutional framework of fiscal management of oil revenue by continuing withdrawals from the Excess Crude Account (ECA).
Read More:http://www.sunnewsonline.com/webpages/news/businessnews/2010/nov/08/bussines-08-11-2010-001.htm
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