HenryThegreat_

Late yesterday, the S&P Global Ratings announced what some folks had anticipated. Nigeria’s credit rating was upgraded by one notch to B (five levels below investment grade), the first upgrade since 2012. According to S&P, the considerations for the credit rating upgrade were: ✑ Higher oil prices ✑ Improved capacity to refine and export crude ✑ The decision to liberalise the exchange rate This is a big win. I have seen, in some places, the frustration over the gap between macro wins and micro pains. The honest answer is that the average Nigerian on the roadside cannot connect this progress to their well-being today. They will only feel it through a longer transmission chain that has not yet finished playing out. A credit upgrade essentially signals to the global market that Nigeria is a less risky borrower, allowing the federal government and major Nigerian corporates to borrow at cheaper rates abroad. The bread-seller in Mushin does not borrow from JP Morgan or from the international debt market, so the immediate effect on her bottom line is zero. Where it eventually shows up for her is in three indirect channels: ✑ First, cheaper sovereign borrowing means the FG can enter the international debt market and borrow at a lower rate to refinance some of its costly debt. This will result in lower debt service spend and, in theory, provide more fiscal room for roads, power, security, etc. ✑ Second, lower country-risk attracts FDI and portfolio inflows, which strengthens the Naira (we might see an extended stability in the FX market. Naira is still likely to remain a darling). The imported inflation will also slow, and this is the channel where the Mushin trader would feel it the fastest. ✑ Coys can refinance their debt or raise capital for expansion. A business expansion opens the door to hiring, which means higher income in the economy. However, all of these still depend entirely on whether the reforms continue and whether the fiscal headroom is actually deployed productively rather than consumed (I've been hearing news of how APC Governors have been cornering funds for the Presidential campaign. Toor). By the way, my family members and I in the equities market will smile at this development.

One of the hardest things to do as an investor, looks easy but far from it.

Just invest 500m in treasury bill and be getting 15% (75m) every year for free and your 500m is still yours anytime you want it. The rich keeps getting richer mehn.