Abuja — Favourable rating by three renowned international bodies is boosting investor confidence in the Nigerian economy, while increasing access to low-term external credit for local businesses.

Reports of a Global Economic Paper researched by Goldman Sachs and published toward the end of last year forecast that between 2005 and 2050 Nigeria would be the fastest growing economy in the world well and above China, Brazil, Korea, Turkey, Indonesia and Mexico.

The report predicted a progressive real Gross Domestic Product growth of 5.0percent between 2005 and 2010 and 7.0 percent between 2045 and 2050.

The Goldman Sachs report suggested that if current reforms are sustained Nigeria would emerge the strongest economy in Africa, superseding South Africa and Egypt; by 2020 it would become one of the 25 biggest world economies and by 2025 one of the world's biggest 20.

The study however places Nigeria low on its newly introduced Growth Environmental Score (GES), "which aims to summarise the overall structural conditions and policy settings for countries globally".

On the optimistic side, it suggests, "improving long term foundations is key to converting potentiality into reality". The Administration's reform programme is directed to ensuring that the necessary conditions are put in place to prepare Nigeria for rapid economic growth.

Another favourable report came from Standard and Poor's, (S&P) which, like Fitch before it, was invited by the Minister of Finance, Dr Ngozi Okonjo-Iweala on behalf of the Federal Government to assess the status of the nation's economy within the context of the on-going economic reform programme.

S&P, which monitors the economic prospects of 110 sovereign governments worldwide, described the outlook on Nigeria as "stable" and noted "the government's improving fiscal management and outturns."

The report by S&P which was released on February 6, 2006 in London also identified the Paris Club debt deal, the movement toward an oil price-based fiscal rule and significant programme of expenditure reform as factors which are freeing up resources for investment in the country's economic development in areas like infrastructure.

According to S&P: "These reforms, aided by higher oil prices, have seen the government's consolidated balance shift from repeated deficit pre-2004, to a surplus of more than 10% of GDP in 2005, expected to rise to 16% and 17% in 2006 and 2007, respectively."

The report also confirmed Nigeria's newly established status as a net creditor country with foreign reserves estimated at about $30 billion in 2005, almost double the 2004 level. It noted that the nation's economic prospects will further improve when further progress is made in tackling the political and social challenges that the nation faces in different areas.

A statement issued on the ratings by the Special Assistant to the Finance Minister on media, Mr Paul Nwabuikwu, quoted the Honourable Minister as being elated.

She said: "It shows that the Fitch rating was not a fluke. S&P, like Fitch, is a respected name and it worked independently to produce its report so we are very pleased that the favourable assessment of the performance of our economy in the short and medium term has been confirmed. It shows we are doing the right things and that there is cause for optimism but we cannot afford to rest on our oars just yet. There is still a lot of more work to be done to ensure that the economy continues to improve, jobs created and poverty declines significantly."

The BB- rating puts the Nigerian economy in the same category as those of Brazil, Indonesia, the Philippines, Turkey, Ukraine and Venezuela.

Explaining further, Dr. Okonjo-Iweala identified the following benefits which the country stands to reap from the rating of Nigeria by S&P and Fitch as follows:

- The private sector will now have better access to international financial and capital markets at cheaper cost because of Nigeria's better global profile as confirmed by the rating. This is because a country without a rating is an unknown quantity and investors tend to avoid it or lend to it at very high interest rates. With the recent favourable rating, the perception of Nigeria's prospects is bound to further improve.

- Related to the above, the rating by Fitch and Standard and Poor's will give further confidence about Nigeria to financial and capital markets all over the world. Any Nigerian entity can go to the same international financial and capital market to raise funds and expect to be given the same favourable treatment as entities from other well rated countries.

Dr. Okonjo-Iweala also stated that the rating of Nigeria has set a benchmark for the future because the rating of the country will become a continuous process from now onwards.

According to the Finance Minister: "In other words, we're challenging ourselves to keep doing better. There is now an international yardstick to judge our performance so we have no choice but to keep working hard so that we can improve on these initial threshold ratings."