Fitch has cut its 2017 economic growth forecast for Nigeria to 1 percent from 1.5 percent, the ratings agency said on Friday.

Nigeria returned to growth in the second quarter of 2017 after shrinking by 1.5 pct in 2016 but the recovery has been fragile because oil revenues remain depressed and hard currency is short.

Speaking at a Fitch event in London, Jermaine Leonard, a director for sovereigns, added that although Nigeria’s 2018 budget had an oil production target of 2.3 million barrels per day (bpd), the Fitch forecast was just above 2 million bpd.

Partly this was linked to a potential flare up in violence in the Niger Delta as elections approach in 2019, he said.

Fitch currently rates Nigeria at B+ with a negative outlook, which reflected the fact that there were still a lot of elements which could take it down, said Leonard. “But at this point we are cautiously optimistic,” he said.

The country is moving ahead with plans to borrow $5.5 billion from foreign investors aiming to plug a large gap in Nigeria’s finances that stem in part from the global fall in oil prices.

Equity markets are also buoyant, having hit three-year highs this week for 2017 gains of around 45 percent. (Reuters)