Fitch downgraded Nigeria’s sovereign credit rating by one notch to B- and left the outlook at stable.
The global ratings agency said that the downgrade reflected the continued deterioration in Nigeria’s government debt servicing costs and external liquidity despite high oil prices in 2022. Fitch said that low oil production and the expensive subsidy on petrol have consumed most of the fiscal benefit of high oil prices in 2022 and will continue to stress already low government revenue levels.
The ratings agency noted that the implementation of a subsidy reduction in 2023 would support Nigeria’s public finances, but constrained oil production and structurally low domestic non-oil revenue mobilisation will limit potential gains.
