Finance Minister Criticises Moody’s Over Downgrade Rating

The Minister of Finance, Zainab Ahmed, has played down the importance of Moody’s downgrade after the rating agency rated the country’s credit status as a Caa1.

Nigeria’s credit rating was B3 before Moody’s downgraded the status to Caa1 citing a weak business operating environment which it said will affect Nigerian banks.

Moody’s stated that Nigeria’s government’s fiscal and debt position will continue to deteriorate. Consequently, the rating agency downgraded the credit status of Guaranty Trust Bank (GTBank), Fidelity Bank Plc and seven others.

Responding to the rating on Thursday, 3, February 2023, Ahmed said the administration of President Muhammadu Buhari has presented details of what the government is doing to stabilise the economy, yet Moody’s rated the country low.

The minister said the conclusion of Moody’s is surprising to the Nigerian government and the rating agency doesn’t have a full understanding of what is happening in Nigeria’s domestic environment. 

“It came as a surprise to us because we have presented all of the works that we’ve been doing to stabilise the economy. 

“But these are external rating agencies that don’t have the full understanding of what is happening in our domestic environment,” the finance minister said. 

According to Ahmed “these are external rating agencies that don’t have the full understanding of what is happening in our domestic environment. 

“The reasons they gave also are very practical ones. They said even though oil production has been restored that, there is still a chance, a higher risk that there could be a relapse to the production levels. 

“Second, they also said that they are concerned that our debt service to revenue ratio is high. And even though their assessment is that we’ve been able to pay off our debts in the medium term, they have confirmed that we have the capacity to pay our debt, but that it is eating too much of our revenue and they flagged that as a high risk.”