Nigeria’s Credit Rating Is Under Increased Pressure From Oil Plunge, Boko Haram

Nigeria’s sovereign credit rating is under increased stress amid the plunge in oil prices, which is compounded by violent attacks by the Boko Haram, according to Moody’s Investors Service, Bloomberg reports.

Nigeria, which is Africa’s largest oil producer and also its largest economy, is falling under mounting pressure as violent attacks from the Boko Haram continue, amid falling oil prices, and as the nation faces its national elections that are set to take place next month.

In Nigeria, oil accounts for around 75 percent of government revenue.

Nigeria’s Central Bank devalued the national currency in November 2014, which was the first time in three years, as the nation’s currency plunged amid falling oil prices.

So far in 2015, Nigeria’s currency – the naira – has fallen 14 percent versus the U.S. dollar on the interbank market.

All of these factors are “weighing on investor demand for Nigerian assets at the moment,” Matt Robinson, the Moody’s manager of the Africa sovereign ratings team told Bloomberg on Thursday. “We’re certainly seeing pressure on the currency, we’re seeing pressure on Nigeria’s bond prices, so it’s one of an array of downside risks.”

Moody’s rates Nigeria’s debt at Ba3, the three levels below investment grade, with a stable outlook.