Moody’s downgrades Nigeria

Moody's Investors Service said it downgraded the Government of Nigeria's long-term issuer and senior unsecured debt rating to B2 from B1 and the senior unsecured medium-term note program rating and the provisional senior unsecured debt rating to provisional B2 from provisional B1.

The outlook remains stable.

Moody’s said the key drivers are as follows:

• The authorities' efforts to address the key structural weakness exposed by the oil price shock by broadening the non-oil revenue base have so far proven largely unsuccessful; and

• As a consequence, while debt levels remain contained and notwithstanding recent cyclical improvements, the government's balance sheet remains structurally exposed to further economic or financial shocks, with interest payments very high relative to revenues and deficits elevated despite cuts in capital spending.

Concurrently, Moody's lowered the long-term foreign-currency bond ceiling to B1 from Ba3 and the long-term foreign currency deposit ceiling to B3 from B2. The long-term local-currency bond and deposit ceilings are unchanged at Ba1.

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