Rating agency Fitch Ratings warns Nigeria of a likely deeper economic contraction and budget deficits and compound pressures on external finances after its decision to join the agreement to cut oil production from producing countries (OPEC+). 

For Fitch, the increased use of concessional multilateral lending will ease short-term liquidity pressures, but the risk of a disruptive macroeconomic adjustment will persist. 

The agency has adjusted its GDP forecasts and forecasts that the Nigerian economy will contract by 3% in 2020, before a recovery to 3% growth in 2021. " Despite the OPEC+ agreement, our oil price forecasts remain unchanged, to $35/barrel for Brent on average in 2020 and $45/barrel in 2021 ," Fitch says. 

For Fitch, the current account surplus by then will record a deficit equivalent to 3.8% of GDP in 2020 and 2.5% in 2021.

In addition, Fitch points to an intensification of external liquidity pressures as a negative rating sensitivity, following its decision to downgrade Nigeria's sovereign rating in April, to 'B' with a negative outlook of 'B+' with a negative outlook.