Nigeria and Angola's continued dependence on oil and gas will create challenges for both countries in the coming years, the global rating agency Moody's said Monday.
"Both Nigeria and Angola have seen their credit profiles come under pressure following the oil price shock in 2014," a statement by the company said.
"For Angola, the key issue will be managing its liquidity pressures and higher debt burden alongside further currency devaluation. For Nigeria, it will be improving its ability to generate revenue," it added.
With oil prices beginning to recover in 2017, both countries saw rising production in their oil and natural gas industries.
"The rise in hydrocarbon production will support growth in both countries and will help to stabilize their deficits," Moody's said.
Yet, revenue generation is still a key weakness for Nigeria, while Angola finds it difficult to cut its large debt load, according to the rating agency.
Meanwhile, Nigeria has struggled to reform its oil sector and increase transparency in the industry, Moody's said, adding that Angola, on the other hand, had created a transparent environment for its oil industry.
Moody's underlined, however, that Angola's main challenge in oil production was higher costs, in which sustainable higher oil prices were crucial for future investment in the sector.
Nigeria's credit rating is 'B2' with a stable outlook, while Angola's is 'B3' with a stable outlook, according to the rating agency.
(Anadolu Agency, 06/19/2018)
