FGN Rated Low in Governance, Policy Effectiveness, Institutional Capability
The Federal Government of Nigeria (FGN) has been rated weak in governance, policy effectiveness, and institutional capability among others, according to detail from Moody’s Investors Service periodic review.
The global ratings firm has this week announced the completion of the periodic review of Nigeria government ratings.
It said the credit profile of the Nigerian government with issuer rating B2 reflects economic strength, supported by the country’s substantial oil and gas endowment and long-term growth prospects.
However, the global rating firm added that the positive country’s strength is constrained by very low gross domestic product (GDP) per capita; institutions and governance strength, with very weak institutional capacity.
Though growth-starved, the Nigerian population has maintained an uptrend, partly driven by the cultural acceptance that clouds economic reasonings. Child control is seen as an act against certain faith due to multi-ethnicity conditions in the country.
Meanwhile, despite the anti-graft crusade, Moody’s cited that there is a high level of corruption, and very poor policy effectiveness; fiscal strength, with relatively low levels of public debt as a downside.
It said low public debt is noted to be followed by a high and deteriorating interest payments to revenue ratio, explained by an underdeveloped revenue base.
The report hints at the Nigerian government being over-reliant on hydrocarbon revenues; and susceptibility to event risk driven by political risk.
Moody’s attributes the risk to a fractious political landscape, militancy in the Niger Delta, and violence in the northeast that aggravates income inequality. \FGN Rated Low in Governance, Policy Effectiveness, Institutional Capability
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