S&PGR Lowers Nigeria Outlook to Negative From Stable

By Stephen Nakrosis

S&P Global Ratings said Friday it revised its outlook on Nigeria to negative from stable and affirmed the nation's B-/B long- and short-term foreign and local currency sovereign credit ratings.

S&P said the new outlook reflects "increasing risks to Nigeria's debt servicing capacity over the next one-to-two years due to intensifying fiscal and external pressures." Stresses stem from low oil production volumes, which has recently been rising, S&P said. Oil production, including condensates, averaged about 1.37 million barrels per day last year, according to S&P. Oil production was below the budgeted 1.60 mbpd, and below Nigeria's Organization of the Petroleum Exporting Countries' production quota of 1.8 mbpd, S&P said.

Other factors include "large refined-petroleum subsidy costs, high debt service expenditure, and a relatively large planned fiscal deficit in the 2023 budget," according to S&P. The 2023 federal budget, excluding that of the states, estimates a fiscal deficit of 11.34 trillion Nigerian naira ($24.6 billion), 5% of GDP for this year, S&P said.

Write to Stephen Nakrosis at [e-mail]

(END) Dow Jones Newswires

02-03-23 1655ET