417,000bpd oil cut will deepen Nigeria’s recession- Fitch

Written by on May 20, 2020

Global credit ratings agency, Fitch Ratings, has said Nigeria’s compliance with the oil production cut deal led by the Organisation of Petroleum Exporting Countries will lead to deeper economic contraction and fiscal deficits.

It also said the development would compound pressures on external finances as a result of the slump in oil prices.

The ratings agency added that Nigeria’s foreign exchange reserves would fall to $23.3bn by the end of 2020.

It insists the increased recourse to concessional multilateral loans would ease near-term liquidity pressures, but the risk of a disruptive macro-economic adjustment would persist.

Nigeria is expected to cut production by 417,000 bpd to 1.41 million bpd in May and June.

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