Falling oil prices, unrest threaten Nigeria's credit rating

Estimated read time: 1-2 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

WASHINGTON (AP) — Standard & Poor's Ratings Services warned Tuesday that it might downgrade Nigeria's credit rating, citing tumbling oil prices and political unrest.

The rating agency said there's at least a 50 percent chance it will reduce Nigeria's long-term credit rating — already a speculative BB-.

Plunging oil prices have damaged Nigeria's economy, Africa's biggest. The country relies on oil and natural gas for 70 percent of its tax revenue and 90 percent of its exports. When S&P last looked at Nigeria's creditworthiness in September 2014, it forecast an average oil price of $105 a barrel this year; now it expects oil prices to average $55 a barrel.

Lower prices will drag Nigeria's economic growth to 5 percent this year from 6.3 percent in 2014. Previously expected to run a trade surplus through 2017, Nigeria is now forecast to run a trade deficit instead. Government debt will grow as a percentage of the economy, S&P forecasts.

The Islamic extremist group Boko Haram is seizing territory in northeastern Nigeria. A presidential election scheduled for February was postponed until early spring because of security concerns.

"Political tensions remain high as the general elections approach," S&P said.

S&P is scheduled to deliver its next report on Nigeria on March 20.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Most recent Business & Tech stories

Related topics

Business & Tech


    Catch up on the top news and features from KSL.com, sent weekly.
    By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

    KSL Weather Forecast