The Global Credit Rating (GCR Ratings) said Nigeria has a positive outlook over the medium term.
The country was rated based on structural reforms introduced in that country in the last 20 months, aimed at achieving better allocation and management of resources through the institution of market-driven monetary and fiscal policies.
The GCR said in a report this week, “under our base case scenario, we expect these reforms to begin to yield mildly positive outcomes in 2025 in terms of lower inflationary pressures, more stable foreign exchange (FX) rates and slightly higher GDP growth.”
GCR also cautioned against quick wins, noting that although progressive, results will not be immediate.
They are expected to start trickling down to local debt issuers, once reforms are entrenched, much to the relief of corporates, who are at the receiving end of high cost of credit, energy and foreign exchange.
Real income and purchasing power will also remain depressed, potentially constraining earnings and cash flow.
Despite the apex bank’s hawkish monetary policy stance, money supply remains high relative to real GDP, due to the impact of significant naira depreciation on foreign monetary assets.
According to the credit rating agency, the rebasing of the consumer price index (CPI) is expected show lower inflation rates for 2025.
“Therefore, we do not expect the monetary policy rate to decline in tandem with rebased inflation rates in 2025.”
Picture: RMI