S&P revises Nigeria’s outlook as ECOWAS deadline for Niger expires

S&P Global Ratings recently announced a revision of the outlook on Nigeria, changing it from negative to stable, based on the reforms implemented by Nigeria's new administration. This news comes amidst growing concerns over heightened geopolitical risks in the West African region, triggered by the recent coup in Niger. The situation has raised alarms, leading military leaders from Burkina Faso and Mali to send a joint delegation to Niger, showing solidarity after the ECOWAS deadline expired. Femi Oladeye, a partner at Argentio Capital Partners, shed light on the potential impacts of these developments on Nigeria and the wider West African bloc. Nigeria, being closely tied to Niger both economically and geographically, faces risks that could jeopardize its macroeconomic stability. The interdependencies between the two nations, including trade relations and infrastructure projects like the cross-border rail line, highlight the ripple effects of instability in Niger. This could undermine investor confidence and disrupt the flow of goods and people within the region. The spate of military coups along the Sahara belt poses a significant threat to the continent's security and democratic principles. These upheavals create a security cordon around affected countries, deterring investment and hindering foreign exchange flows crucial for economic growth. While S&P's upgrade of Nigeria's outlook to stable signals support for the government's reforms, some analysts feel the market had already priced in this development. The local market's response to this change will be crucial in determining its actual impact on Nigeria's economic landscape. The trend of military takeovers in Burkina Faso, Mali, Niger, Sudan, and Chad reflects a worrying pattern of political instability in sub-Saharan Africa. The rise of military regimes poses a risk to economic growth, with constraints on freedoms, policy uncertainty, and lack of democratic reforms stifling progress. There are concerns that the acceptance of military takeovers in some countries could embolden fringe players within the continent, leading to a surge in military coups. This trend echoes the turbulent era of the 80s and raises fears of Africa being overrun by authoritarian regimes. It is crucial to track these developments closely and recognize the detrimental impact of military rule on the continent's future prospects. The celebration of military coups as a solution is misguided and fails to acknowledge the historical failures of such regimes. The need for democratic governance and respect for institutions remains paramount for sustainable growth and stability in Africa.