Standard and Poor’s (S&P) the compassing powerful credit rating agency brought a smile to the faces of President Jonathan’s economic team by lifting the country’s credit rating from stable to positive. According to AFP news agency, "It also reaffirmed its B+/B long- and short-term issuer credit ratings for Nigeria, the continent’s most populous nation." This is a good news for President Jonathan and his economic team principally Dr. Ngozi Okonjo-Iweala, Minister of Finance and Lamido Sanusi, Governor of the Central Bank of Nigeria (CBN), the country apex reserve bank.
The uplift of the country’s economic outlook to positive will enable the country to continue with its on going reforms and to justify the removal of fuel subsidy. The country‘s administration can use it as a leverage to assure investors and capitalists that the country is moving in affirmative direction. The Nigerian economic team will be strengthened on its battle against the rising inflation and the softening of naira.
Inspite of the security and social problems confronting Nigeria, including the Boko Haram endless bombing and the looming removal of the fuel subsidy the premier credit rating agency S&P still has faith in the country’s economic outlook and the on going reforms by President Jonathan ‘s administration. The agency reiterated that, "The Nigerian government under President Goodluck Jonathan has been undertaking several important reform initiatives and is tightening its fiscal and monetary stance," and continued to emphasized that the "The authorities have restructured and strengthened the banking sector, and we expect economic growth to remain strong. We are revising our outlook to positive from stable …"
AFP news agency further reported that, "Economists and government officials view the move as essential to allow for more spending on the country’s woefully inadequate infrastructure and to ease pressure on its foreign reserves.Nigerians however view the subsidy, designed in part to hold petrol prices at 65 naira per litre ($0.40, 0.30 euros), as their only benefit from the nation’s oil wealth.Nigeria’s central bank head Lamido Sanusi has also led sweeping bank reforms seen as having pulled the sector out of crisis. Finance Minister Ngozi Okonjo-Iweala is a highly respected former World Bank managing director. However, the country has also seen worsening violence blamed on Islamists and warnings from the Christian population that they will defend themselves against further attacks. Standard & Poor’s noted concerns over the situation.Nigeria relies tremendously on the oil industry for revenue, and the ratings agency pointed out that crude exports accounted for 72 percent of current account receipts in 2010."
This endorsement from S&P is goodwill gesture to the country’s administration that has many challenges coming its way. Most especially the Boko Haram’s nightmare and its determination to shake and destroy the stability of the emerging economic power of this West African nation. The rampant, senseless and ceaseless bombings from this radical organization pose a great threat to the security and wellbeing of the nation. And without relative peace and stability; ample and comfortable environment the flight of capital and investment becomes more imminent. Therefore the upgrade is an approval by S&P on the monetary and fiscal policies employed by the administration to grow and stabilize Nigeria’s economy.
Emeka Chiakwelu is the Principal Policy Strategist at Afripol Organization. Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa. http://afripol.org/ email@example.com