Nigeria Has Highest Interest Rate, Lowest External Debt among MINTs

01 Apr 2013

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By Eromosele Abiodun

With a monetary policy rate, that is, the benchmark interest rate of 12.00 per cent, Nigeria has the highest rate among the MINT countries, a report by the International Monetary Fund (IMF) and Investment One Financial Services Limited has revealed.

The MINT is an acronym for frontier markets serving as the major investment destination and comprises Mexico, Indonesia, Nigeria and Turkey.
Indonesia came second with an interest rate of 5.75 per cent followed by Turkey and Mexico with 5.50 per cent and 4.50 per cent interest rates respectively.

Also, with a sovereign rating of BB-, Ba3, BB-, Nigeria has the worst sovereign rating among the MINTs followed by Turkey with BB, Ba1, BBB- rating. Indonesia has a sovereign rating of BB+, Baa3, BBB- while Mexico has a BBB, B1, B+ rating.
In the same vein, the report also revealed Nigeria has the highest inflation rate among the MINT countries with 9.00 per cent inflation rate. Turkey came second with 7.03per cent inflation rate while Indonesia and Mexico has inflation rate of 5.31 per cent and 3.55 per cent respectively.

However, Nigeria fared better in other economic indicators considered. For instance, Nigeria is the least leverage country among the MINTs with a debt to GDP ratio of 17.00 per cent. Indonesia came second with 25.00 per cent while Turkey and Mexico followed with 39.40 per cent and 42.85 per cent respectively.

According to the report, Nigeria has the least external debt with $6.5 billion followed by Mexico with $124 billion while Indonesia and Turkey has $251.2 and $326.3 external debts respectively.
Conversely, Mexico has the highest external reserve of $164.2 billion followed by Turkey with $137.6 billion while Indonesia and Nigeria has $108 billion and $47.4 billion external reserve respectively.

On the equities market front, the Turkish market recorded the biggest gains amongst the group in the 2012 financial year, closing with an appreciation of 61.73 per cent (in dollar terms) to rank as the second best market amongst the 94 tracked. The Nigerian market followed closely with a 40.78 per cent gain (in dollar terms) to rank fifth. The Mexican and Indonesian markets closed with gains of 27.80 per cent and 4.59 per cent respectively.

The report noted that the Nigerian financial market remained positive after attaining a leading role by estimation amongst the generally accepted investment destination called MINT.

“Our assertion is premised on the fact that the equities market has remained amongst the top performing market backed by sound macro-economic variables, stable sovereign outlook, a huge and active demography and improved corporate governance and earnings by listed entities, “ the report stated.

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