- Moody’s Investors Service has downgraded Nigeria’s long-term issuer ratings to B1 from Ba3 and has assigned a stable outlook, concluding the review for the downgrade that was initiated on March 4, 2016. The key drivers of the rating action were increased external vulnerability brought about by the prospect of lower-for-longer oil prices; execution risk in the transition to a less oil-dependent federal budget, and the implications for the government’s balance sheet should it not achieve its aims; and an elevated interest burden over the next two years while the government grows its non-oil tax receipts. According to a statement, the stable outlook reflects the fact that Nigeria’s credit fundamentals will continue to compare favourably with peers at the B1 level, despite the likely further deterioration in the country’s credit metrics due to the oil price shock. Concurrently, Moody’s lowered Nigeria’s long-term foreign-currency bond ceiling to Ba3 from Ba2, the long-term foreign-currency deposit ceiling to B2 from B1, and the long-term local-currency bond and deposit ceilings to Ba1 from Baa3.
- Audu Ogbeh, the Minister of Agriculture, has disclosed that the FG is working towards resolving clashes between herdsmen and farmers with the establishment of grazing reserves in the next four months. According to him, the plans are at an advanced stage. Ogbeh said that nine state governments have already agreed to release 5,000 hectares of land for the reserves. The reserves would be tilled with grass imported from Brazil, a development that has generated criticisms against the government. Ogbeh however explained that the grass being imported guarantees high yield as they have already been treated. He also said that some private companies are already in agreement with the government for the utilisation of some derivatives and by products from the reserves, adding that the reserves would boost the economic status of the herdsmen.
- Oil, gas and power firms owe banks in the country about
N3.931 trillion as at the end of December 2015, according to latest data from the CBN’s Quarterly Statistical Bulletin for Q4, 2015. Their indebtedness represented a decline of 1.36 percent or N54 billion against N3.985 trillion recorded in Q3, 2015. A breakdown of the commercial banks’ sectoral credit allocation showed that the downstream, natural gas and crude oil refining segments owed banks up to N2.273 trillion as at year end. This was slightly higher than the N2.264 trillion recorded for Q3, while the upstream and oil and gas services sector owed N1.156 trillion. In the power sector, the banks are owed N340.31 billion by independent power plants and power generation companies, while power transmission and distribution companies owed N162.44 billion. As a result, the exposure of the banking sector to energy firms as at year end, increased by 10.02 percent or N358 billion.
- The federal executive council has approved a three-year target to achieve self-sufficiency in refined petroleum products. At the end of its meeting which was presided over by Vice-President Yemi Osinbajo, Zainab Ahmed, minister of state for budget and national planning, said the objective of the three-year deadline is to ensure availability of refined products, reduce demand on foreign exchange as well as export refined products. ”We are setting a three-year deadline to achieve self-sufficiency in refined petroleum products and to become a net exporter of petroleum products,” she said. “The objective of this is to increase domestic supply of refined products and to reduce demand on foreign exchange for importing refined products in our country. The ministry of petroleum is pushing this. There is also a plan to push for the passage of the PIB in conjunction with the national assembly.”