A fortnight ago, Moody’s Investor Service announced credit-rating downgrades of three non-financial institutions: Dangote Cement Plc, Seplat Energy Plc and IHS Holdings Plc. The global rating agency cited the companies’ significant exposure to Nigeria’s macro and fiscal whims as the basis for the downgrade.
Key Takeaways
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Moody’s Investor Service downgraded IHS’ credit rating, alongside two other non-financial companies (Dangote and Seplat), due to their exposure to Nigeria’s woes.
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IHS Holdings derives a significant portion of its revenues from Nigeria (in naira), as such currency devaluation and fx shortages negatively impact its earnings.
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Despite IHS’ best efforts to mitigate these issues, Moody’s message is clear: Nigeria catches up even with the most financially prudent.
This move wasn’t a huge shock given that, a week before that, Moody’s announced the downgrade of Nigeria’s credit rating from B2 to B3. It cited a deterioration in Nigeria’s fiscal and external positions despite the oil
