International ratings agency Standard & Poor's currently has Nigeria on a negative sovereign ratings watch. (The country is rated at BB minus.) "This means there is a clear and present danger," explained the agency's regional manager: sub-Saharan Africa Konrad Reuss on Wednesday. The issues are the Boko Haram insurgency, the fall in oil prices (because of the importance of oil for government revenues and export revenues) and the upcoming (and previously postponed) elections.

However, he cautioned that elections did not automatically deliver bad results. They could deliver good ones. It was simply that elections caused uncertainty.

Despite these concerns, Nigeria remained in the middle of the sovereign ratings rankings for Africa. "Notwithstanding the negative watch, I like Nigeria," he affirmed. "It is a diversified economy. It has an interesting private sector."

"Ratings are really about credit-worthiness," he elucidated. If his agency did downgrade Nigeria, it would have little effect on that State's borrowing. It would be more an issue of the country's image. "From a debt perspective, even if there was a downgrade, Nigeria would still look quite solid."

No less than 80% of Nigeria's sovereign debt was naira-denominated and only 20% in dollars. So the country faces no foreign debt servicing problems. The country had effectively abandoned a fixed exchange rate and the floating exchange rate was acting as a safety valve for the economy.

Standard & Poor's has six main categories it uses when rating governments. These are (with Nigeria's current classifications): institutional and governance effectiveness (weakness); economic structure and growth (weakness); external liquidity and international investment position (neutral); fiscal flexibility and performance (weakness); debt burden (strength) and monetary flexibility (neutral).

Reuss clarified that the reason economic structure and growth was identified as a weakness was because of weakness in the structure of the economy and not the country's growth rate. The structural problems were not being offset by the good growth.

In comparison, he noted that another major West African economy, Ghana, was "in dire straits". This was not the case with Nigeria. "Nigeria is a different story. There are so many ways for Nigeria to still lead the pack at the end of the day. Agriculture has done well, [also] banking, telecommunications."

He also addressed last year's rebasing of Nigeria's gross domestic product, which made the country's economy the biggest in Africa. "It [rebasing] reflects best practice. Today, we have a much more realistic picture of the Nigerian economy."

Reuss was addressing consultancy Frontier Advisory's Frontier Forum seminar on Nigeria in Sandton, north of Johannesburg.