In recent times, Nigeria’s rating was downgraded in reports revealed by international credit rating agencies like Moody’s and Fitch Ratings. The Nigerian government bemoaned the effect of these downgrades on the cost of funds in the international market, which is said to have been concluded considering external factors and not from reality. This was disclosed by the Minister of Finance, Budget and National Planning, Mrs. Ahmed Zainab, while she received Deputy Director General of the United Nations (UN), Mrs. Amina Mohammed, in Abuja.
Moody’s lowered Nigeria’s long-term issuer rating and foreign currency senior unsecured debt rating to B3 from B2 in both local and foreign currency. While Fitch downgraded the country’s Ratings long-term foreign currency Issuer Default Rating (IDR) from B to B-, putting it six grades above default and on a level with Ecuador and Angola. Despite a dramatic increase in worldwide crude oil prices in 2022, Moody’s stated the decision was prompted by the considerable deterioration in Nigeria’s government finances.
Nigeria was downgraded despite the global challenges.
Also, Mrs. Zainab made this know on the same day the National Bureau of Statistics (NBS) released its report, which shows that Nigeria’s total merchandise trade decreased by about N1.24 trillion to N11.60 trillion in the third quarter of the year (Q3 2022) compared to N12.84 trillion in the preceding quarter. Speaking on the challenges facing the incumbent administration, she explains that Nigeria was downgraded despite the global challenges affecting the smooth operation of countries worldwide.
According to her, these significant global challenges include the COVID-19 pandemic, the Ukraine-Russia war and Climate Change, the cost of quantitative easing, high inflation and high-interest rates, among others. She added that Nigeria was rated lower due to external factors, despite the fact that the nation is working hard to flourish regardless of the difficulties cited. In addition, Mrs. Zainab strongly recommends that credit rating agencies evaluate their ratings with caution and up-to-date information.
The minister called for United Nations support.
Furthermore, Mrs. Zainab, who expressed gratitude to the United Nations Population Fund (UNFP) for its assistance rendered to the National Population Commission (NPC), also called for United Nations (UN) support as Nigeria prepares for its general elections and population census next year. She elaborated that the UNFP has provided the country with a special adviser to collaborate with the population commission towards achieving the national census plan scheduled to be carried out in April after the elections.
She continued by requesting the financial help and involvement of the United Nations in carrying out these tasks. Mrs. Amina Mohammed, Deputy Director General of the United Nations (UN), appealed similarly to the international organizations, requesting that they change a system in which African nations borrow money at a more significant cost than their contemporaries in Europe. In addition, Mrs. Amina Mohammed cautioned against removing gasoline subsidies due to the wide-ranging effects that doing so would have.
Country’s total goods trade fell to N11.60 trillion in Q3 2022.
The UN deputy director general acknowledged subsidies’ vital role in the economy. However, she stressed that they must be administered with care, focusing on the things that people value so that they can see how subsidies help alleviate poverty and provide opportunities for young people. According to data released Monday by the National Bureau of Statistics (NBS), Nigeria’s total goods trade fell to N11.60 trillion in Q3 2022 from N12.84 trillion in Q2 2022, a reduction of around N1.24 trillion.
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