The current devastation by the deadly coronavirus pandemic on the global economy has worsened Nigeria’s economic situation, with Fitch Ratings agency downgrading the country’s long-term foreign exchange issuer default rating (IDR) to B- from B+.

The agency said in its latest report that the downgrade reflected the impact of the prevailing pressures on Nigeria’s external reserves amid the unprecedented decline in global crude oil prices in the wake of the continued devastation of the global economy by the COVID-19 pandemic.

The report said the shock from the pandemic intensified the external pressures and risks of disruptive macroeconomic adjustments in the face of Nigeria’s deplorable monetary and foreign exchange policy as well as the dearth of fiscal buffers.

On Monday, the federal government confirmed the pandemic has already unsettled its fiscal and economic plans for the year, leaving it to grapple with urgent revision of its budgetary projections.

“Because the 2020 Appropriation Act was based on certain fiscal assumptions, we have been compelled to revisit them given the emerging economic realities as a result of the impact of COVID-19,” the Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Monday at the launch of the N500 billion stimulus package against the pandemic.

The minister said with projected oil revenues significantly affected, the Nigerian government was compelled to revise the benchmark oil price for 2020 from $57 per barrel to $30 and oil production to 1.7 million barrels per day.

Similarly, she said the government resolved to adjust downwards its non-oil revenue projections, including various tax and customs receipts as well as proceeds from the privatisation exercises.

The economic shock also compelled the Central Bank of Nigeria a fortnight ago to ‘devalue’ the country’s national currency by almost 18 per cent, from the previous rate of N306 to the dollar to N380 per dollar.

The extent of the adjustment may not be commensurate with the level of impact by the pandemic of the economy, with economic analysts saying Nigeria is facing a potential economic depression in the coming months.

Fitch noted Nigeria’s ‘B’ rating also reflected the existence of large contingent liabilities on the government’s balance sheet, which is capable causing a steeper rise in the country’s debt profile currently put at over N32 trillion.

Even the state governments are not spared the pangs of the pandemic, with the federal government announcing a scheme granting them moratorium that would involve the rescheduling of their loans and debts repayment till after the crisis.

“The collapse in oil prices will pressure already overstretched state and local governments’ resources, possibly requiring financial assistance from the Federal Government,” the report said.