By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-World ratings Agency, Fitch Ratings Ltd on Tuesday said growth will slow in Nigeria, Angola and Gabon in 2015 because of sliding oil prices and tighter policy, the company affirmed in its latest Sub-Saharan Africa (SSA) Credit Overview.
The global rating agency revised Nigeria’s growth down from 6.4 percent to 5.2 percent for 2015. ‘’ This will be offset by an uptick in South Africa’s growth, although challenges in the electricity sector may see growth underperform. Oil importers and countries with the fiscal space to invest will continue to grow robustly,’’ it said.
Fitch says lower oil prices will dampen growth in Angola, Nigeria and Gabon, which will also see external and fiscal balances worsen.
However, it affirmed that it expects average GDP growth of 5 percent in 2015 for the 18 countries it rated, up from 4.5 percent in 2014.
According to the rating agency, growth will not be evenly spread across the region but should be resilient to lower oil prices. ‘’Countries’ ability to grow will be impacted by their degree of commodity dependence, exposure to China, domestic challenges and capacity to invest,’’ it added.
Authorities in Nigeria recently proposed an austere measure for next year by cutting its spending and devaluing its local currency the naira amid falling external reserves.
On November 25, the Central Bank of Nigeria (CBN) devalued the naira by eight percent (8%) to N168 to a US dollar. The CBN also raised interest rates to 13 percent by 100 basis points in a view to check losses to its foreign reserves from defending the currency against weaker oil prices.
The CBN said Nigeria’s external reserves fell to $35.8 billion on December 9, down 19.5 percent from $44.5 billion recorded same date last year.
In late November, Nigeria’s foreign reserves were reported to have fallen to a five-month low of $37.1 billion, according to the CBN.
Nigeria’s central bank reported that reserves decreased by $2 billion in one month, from $39.1 billion on October 21, 2014 to $27.1 billion on November 21, 2014.
