S&P Raises Nigeria’s Sovereign Credit Rating
S&P Global Ratings has upgraded Nigeria’s long-term foreign and local currency sovereign credit ratings to “B” from “B-”.
The global ratings agency announced the upgrade on Friday. It also affirmed Nigeria’s short-term ratings at “B” with a stable outlook.
According to S&P, Nigeria’s macroeconomic position has improved due to ongoing reforms, stronger oil production and higher domestic refining capacity.
Reforms Boost Investor Confidence
S&P said the liberalisation of Nigeria’s foreign exchange market in 2023 improved access to foreign currency and strengthened investor confidence.
The agency also praised reforms aimed at expanding the tax base and increasing petroleum revenue transfers to the Federal Government.
“Three years of sustained structural reforms have improved Nigeria’s economic outlook,” the agency stated.
S&P projected Nigeria’s debt-to-revenue ratio to decline to 338 per cent in 2026 from nearly 500 per cent in 2023.
Dangote Refinery Supports Economic Growth
The agency highlighted the growing impact of the Dangote Refinery on Nigeria’s economy.
According to the report, increased domestic refining capacity will reduce dependence on imported petroleum products and strengthen the country’s current account position.
S&P forecast Nigeria’s current account surplus to rise to 5.8 per cent of GDP in 2026, compared to 4.8 per cent in 2025.
Inflation and Security Challenges Remain
Despite the positive outlook, the ratings agency warned that inflation and insecurity still pose risks to economic stability.
It noted that rising fuel prices and global oil market pressures continue to increase inflation ahead of the 2027 general elections.
S&P projected inflation to average 17.7 per cent in 2026 before dropping below 10 per cent by 2028.
The agency also identified poverty, unemployment and low tax revenue as key structural challenges.
Finance Minister Welcomes Upgrade
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, welcomed the latest rating upgrade.
He said the decision followed similar positive assessments by Fitch Ratings and Moody’s in 2025.
According to Oyedele, the improved ratings reflect growing international confidence in the reforms introduced under President Bola Ahmed Tinubu.
“These independent assessments confirm that the reforms are delivering measurable results and strengthening Nigeria’s economic foundation,” he said.
Government Rejects Fuel Subsidy Return
Oyedele also reaffirmed the Federal Government’s opposition to fuel subsidy payments.
He described fuel subsidies as inefficient and harmful to public finances.
According to him, subsidy payments previously weakened foreign exchange liquidity and diverted resources from national development priorities.
The minister, however, admitted that inflation, unemployment and food insecurity still require urgent government attention.
He thanked Nigerians for their patience and resilience during the reform process and expressed optimism that the improved ratings would attract more investment into the country.
