Fitch’s Reversal Of Nigeria’s Economic Outlook Will Reduce Borrowing Cost, Boost Investments- FDC

Fitch Ratings reversal of Nigeria’s economic outlook to stable from negative will reposition the country’s risk perception and attract Foreign Direct Investment, Financial Derivatives Company has said.

The Lagos based Research and Investment Company said this in its bi-monthly economic and business update, seen by THE WHISTLER.

 
Fitch had earlier reversed outlook for Nigeria to stable while affirming the country’s credit rating at ‘B’.

The reversal was pegged on the economic improvement due to the $3.4bn from the International Monetary Fund, boost in foreign exchange market following rationing measures by the Central Bank and foreign exchange adjustments, as well as the ease of lockdown.

FDC said the development will, “improve Nigeria’s risk perception, thus increasing the country’s ability to borrow from the capital market while lowering Nigeria’s borrowing costs.”

The Lagos based firm expects the revised credit ratings to accelerate Nigeria’s access to four loans at more favourable terms.

Nigeria is eying fresh loans from the World Bank and the African Development Bank and the Islamic Development Bank, to meet up fiscal and infrastructural obligations.

The FDC said the improved rating will also reduce the Nigeria’s debt service burden.

With the country’s sinking FDI, the firm expects the rating to “boost investor confidence in the Nigerian economy which should spark renewed interest from Foreign Portfolio Investors.”

Nigeria in the second quarter of 2020 saw its FDI tumble 91.06 per cent to $385.32m, from $4.31bn realised in the first quarter of this year.