S&P could cut Nigeria

Standard & Poor's said it placed its BB- long-term foreign and local currency sovereign credit ratings on the Federal Republic of Nigeria on CreditWatch with negative implications.

At the same time, the agency affirmed Nigeria’s B short-term foreign and local currency sovereign credit ratings and long- and short-term national scale ratings at ngAA-/ngA-1.

Following the fall in crude oil prices in spot and futures markets of about 50% since June 2014, S&P revised its oil price assumptions significantly downward for the period 2015-2018.

When it published its last research update on Nigeria in September, the agency expected Brent oil prices to average $105 per barrel (/bbl) in 2015 and $101.25/bbl in 2015-2018. S&P now assumes an average Brent oil price of $55/bbl in 2015 and $70/bbl in 2015-2018.

Consequently, the agency revised its forecasts for Nigeria's macroeconomic indicators, including its fiscal, and most markedly, its current account position. Nigeria relies on oil and gas for about 70% of its fiscal revenues and more than 90% of its exports.

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