S&P Global Ratings has upgraded Nigeria’s sovereign credit outlook from stable to positive, reflecting renewed optimism over the country’s ongoing economic reforms and strengthening macroeconomic indicators. The ratings agency simultaneously affirmed Nigeria’s long- and short-term foreign and local currency ratings at ‘B-/B’, as well as its national scale ratings of ‘ngBBB+/ngA-2’.
In its assessment, S&P said the improved outlook underscores Nigeria’s progress in stabilising its fiscal, monetary, and external positions.
“The positive outlook reflects improving external, economic, fiscal, and monetary results,” the agency stated, while noting that persistent challenges remain, including low GDP per capita, elevated debt servicing obligations, and weak statistical systems.
Reforms Underpin Upgrade
The revised outlook comes on the back of a sweeping set of reforms rolled out since mid-2023 under President Bola Tinubu’s administration. Key actions include:
- Exchange rate liberalisation aimed at unifying Nigeria’s FX market
- Removal of fuel subsidies, freeing up revenue for public spending
- Efforts to broaden government revenue collection
- Increasing crude oil output following operational improvements and better pipeline security
- Support from the commissioning of the Dangote refinery, expected to boost energy self-sufficiency and reduce import burdens
According to S&P, these policy steps have placed Nigeria on a “more stable fiscal and monetary trajectory” and improved confidence among investors and development partners.
Path Toward Greater Resilience
S&P also acknowledged the Nigerian authorities’ broader push to strengthen economic resilience and long-term growth potential.
“We think authorities are taking steps to improve the economy’s growth prospects and macroeconomic resilience,” the agency added.
Analysts say the positive outlook—typically a precursor to a potential upgrade—signals growing international confidence in Nigeria’s reform direction. However, sustained implementation will be critical, especially as the country continues to contend with inflationary pressures, foreign exchange volatility, and structural production constraints.
With the outlook now improved, Nigeria could be positioned for stronger credit ratings in the near future if reforms continue to gain traction and macroeconomic gains hold steady.
