Emefiele: Nigeria Still on JP Morgan’s Bond Index, Reclassification Not Due to CBN Lapses - THISDAY
BY James Emejo in Abuja
The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has clarified that Nigeria is still on the JP Morgan Bond Index contrary to recent reports that the country had been delisted from the rating agency’s platform.
Earlier reports had insinuated that JPMorgan had delisted the country from the market following the Nigerian National Petroleum Corporation (NNPC)’s inability to transfer earned funds from January to March to the government due to petrol subsidies and low oil production.
As a result, the American bank had announced that it moved Nigeria’s debt out of its ‘overweight’ category to ‘Market weight’.
However, Emefiele, while clarifying the development after the two-day meeting of the Monetary Policy Committee (MPC), explained that the country was never removed from the rating agency’s platform adding that Nigeria’s stake was simply reclassified from the ‘overweight’ category to ‘Market weight’.
He also said the change was not a result of certain failures on the part of the CBN.
The CBN governor said, “Contrary to a widespread media report that Nigeria was delisted or removed from the JP Morgan Bond Index.
The truth is that that is very untrue- Nigeria is still on the Index. We were only reclassified – Nigeria’s rating was reclassified from Over-weight to Market-weight, which is just a mere reclassification of our size in the index.
“It is akin to a rating agency changing your outlook from maybe positive to stable and this is basically what has happened.
“Let me repeat that Nigeria has not been deleted from any JP Morgan bond index.”
According to him, “The change is not a result of certain failures on the part of the CBN. What is important is that at least one thing they have said very clearly is that Nigeria had been left as an Overweight country because they felt that as an oil-producing country, accretion to reserves in the midst of an increase in crude price should result in accretion to reserves.
“And since they are seeing that this is not happening that is the reason Nigeria’s rating has been brought from over-weight to market-weight but I think the other details are in the report.”