Nigeria’s rating by international rating agencies to dwindle again — Experts
By Omolola Dede Adeyanju
Despite Nigeria’s downgraded ratings by international rating agencies, especially Moody’s downgrades of nine Nigerian banks and the sovereign rating to Caa1 from B3, there are lingering signs that there could be another downgrade on the country’s rating.
This can be traced to incessant evaluation of the image being presented to foreigners at this period of currency crisis and non availability of means to trade. Foreign investors are likely to refrain from investing more in the country and sending major investments to neighbouring African countries.
Businesses are beginning to crumble as ATM machines go empty, people void of cash are discouraged by the lengthy queue in bank halls and futility of efforts to get cash after enduring the queues and waste of time.
According to a statement by the Chairman, Association of Securities Dealing Houses of Nigeria, Sam Onukwe affirmed that the foreign investors had left the shore of the Nigerian bourse because they were losing money.
Onukwue identified some factors such as security challenges, inflation rate, taxation of market instruments, especially, Capital Gain Tax, a disincentive to investors, government’s management of debt, funding of budget deficit, privatisation of moribund parastatals among others to determine the investment environment and drive activities in the Nigerian financial market in 2023.
The above factors adding up to the currency problems in the country has made experts conclude that Nigeria’s economy is set to get worse, thereby leaving no merit for foreign investment.
An excerpt from a statement by the Lagos Chamber for Commerce and Industry (LCCI), also confirmed that “Businesses are suffering the consequences of the CBN currency management policy lapses.”
Regarding the deadline extension for phasing out old notes, the Director General, LCCI, DR. CHINYERE ALMONA, FCA, in her statement noted that the Chamber does not see any value in the phasing out of old notes if the scarcity of the new Naira notes persists.
She said, “While we support the drive toward a cashless economy, redesigning the Naira and phasing out old currency notes could have been better planned and implemented with no hardship for businesses and individuals.
“The hardship for businesses is a backdrop to how Nigerian economy and foreign investment may gradually decline in strength if the issues are not resolved.
“At the same time, the impression given to foreigners through the empty ATM machines in International airports in Nigeria is already degrading the system.”
According to Director General, Nigerian Association of Chambers of Commerce, Industry, Mine and Agriculture (NACCIMA), Sola Obadimu, “The image presented to foreigners at this present situation Nigeria is far from good.”
He added, “I was at Lagos and Abuja airport throughout last week and there were no cash in the ATM machines.”
The DG concluded with the question, “If foreign investors come to Nigeria for the first time and there are no cash in the ATM machines. what kind of investment will such people resolve to do?”
