…As Standard and Poor’s assigns “stable outlook” on Nigeria’s economy
20 March 2018, Sweetcrude, Abuja – In the aftermath of the concession made by the Senate to screen and confirm the nominees of President Muhammadu Buhari to fill the posts of deputy governors of the Central Bank of Nigeria (CBN) and the four members-designate of the Monetary Policy Committee (MPC), the CBN has said it will hold its first meeting of the MPC this year on April 3 and 4.
This is just as Standard and Poor’s (S&P) has affirmed its ‘B/B’ long and short-term sovereign credit ratings on Nigeria. The agency also assigned a “stable outlook” on the country.
CBN spokesman, Mr. Isaac Okorafor, said on Monday the Committee of Governors had now slated the meeting of the MPC for April 3 and 4.
According to him, “We are grateful that the Senate reconsidered its stance on our nominees, given the importance of the MPC to the country’s economic well being.
“The new dates, we hope, will give the Senate the time it needs to conclude the screening and confirmation process of the nominees of the president.”
The MPC was unable to hold its first meeting last January because it could not form a quorum.
This arose from the July 2017 resolution of the Senate to suspend all confirmation processes for presidential nominees whose offices are not specifically listed in the 1999 Constitution.
However, due to the importance of the MPC meetings to the economy, the Senate reconsidered its stance last week on the CBN nominees and gave its Committee on Banking and Financial Institutions one week to screen them.
It was reported that the CBN would have to defer the March MPC meeting originally slated for Monday and Tuesday by a few days, owing to the timeframe given to the Senate committee to conclude its work.
Confirming the postponement, CBN Governor, Mr. Godwin Emefiele, said last week that the Bank’s Committee of Governors would decide on a new date for the meeting of the MPC.
The nominees for the deputy governorship posts of the central bank are Mrs. Aisha Ahmad and Mr. Edward Adamu, while the nominees to be considered for the MPC are Professor Adeola Festus Adenikinju, Dr. Aliyu Rafindadi Sanusi, Dr. Robert Chikwendu Asogwa and Dr. Asheikh A. Maidugu.
Meanwhile, one of the leading global rating agencies, S&P, has affirmed its ‘B/B’ long and short-term sovereign credit ratings on Nigeria and assigned a “stable outlook” on the country.
In its sovereign rating released at the weekend, S&P also affirmed its long and short-term Nigeria national scale ratings at ‘ngBBB/ngA-2’.
According to S&P, the stable outlook signals its assessment that non-oil-sector improvements could support higher economic growth and fiscal revenues over the next 12 months.
However, the agency warned that it may lower its ratings if it does not see the significant fall in fiscal deficits that it anticipated in its base case, but pointed out that it could raise its ratings on Nigeria if it sees much higher economic growth prospects than its base case or the country’s external liquidity indicator improves, perhaps due to further accumulation of international reserves alongside an extension of external debt maturities.
“The ratings on Nigeria are supported by moderate external indebtedness and a relatively low general government debt stock,” the rating agency said.
S&P also expressed concern about high debt service cost in Nigeria.
“The ratings remain constrained by our view of the country’s low economic wealth, weak institutional capacity, lower real Gross Domestic Product (GDP) per capita trend growth rates than peers at similar development levels, and low monetary policy credibility.