S&P revises Nigeria’s outlook to stable on Tinubu’s fiscal reforms

S&P Global Ratings weekend revised its outlook on Nigeria to stable from negative against the backdrop of the fiscal reforms initiated by President Bola Tinubu.
The agency also affirmed its rating for Africa’s largest economy at ‘B-/B’, citing the various institutional reforms that could drive growth and economic development.
“Nigeria’s newly elected government has moved quickly to implement a series of fiscal and monetary reforms, which we believe will gradually benefit public finances and the balance of payments,” the ratings agency said in a statement on Friday.
In July, S&P’s sovereign analyst, Frank Gill, said that the ratings agency was closely watching Nigeria ahead of its review because the recent reforms attracted positive signals.
Earlier in February, the rating agency had maintained Nigeria’s credit rating at “B-/B” but changed its outlook to “negative”. Later in May, another rating agency, Fitch, affirmed the country at ‘B-‘.
Since he assumed power in May, Tinubu has introduced reforms to kick-start growth and attract foreign investors into the Nigerian economy.
The government on May 29 announced the abolition of a costly fuel subsidy regime that had remained a fiscal burden, putting immense pressure on the nation’s finances. The government also announced the unification of the various foreign exchange windows to instil transparency in the forex market.
Tinubu’s reforms have been welcomed by investors, development organisations and various thought leaders. The World Bank recently said that it expects Nigeria to save up to N3.9 trillion in 2023 based on the reforms.
The policies have, however, had an enormous impact on the cost of living and inflationary pressures, forcing many Nigerians to decry its impact. Earlier in the week, labour leaders across Nigeria protested the policies and called for a review of the nation’s minimum wage.

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