Standard and Poor’s (S&P), an international rating agency, has upgraded Nigeria’s long-term foreign and local currency sovereign credit ratings to ‘B’ from ‘B-’, citing improvements in the country’s macroeconomic position, foreign exchange (FX) liquidity, and ongoing economic reforms.
In a statement issued on Friday, the ratings agency affirmed Nigeria’s short-term ratings at ‘B’ and revised the outlook to stable.
The agency’s position comes a day after President Bola Tinubu called for the establishment of an African rating agency, while bemoaning how countries on the continent are rated by foreign firms.
In its latest rating for Nigeria, S&P said the upgrade followed “three years of sustained structural reforms”, including the liberalisation of the FX market in 2023, improved oil production, and increased domestic refining capacity.
The agency said the reforms have strengthened investor confidence, improved access to FX, and boosted Nigeria’s balance of payments position.
“Higher oil production and prices, the large increase in domestic refining capacity, and the 2023 decision to liberalize the exchange rate, are boosting Nigeria’s economic growth and balance of payments outcomes,” the agency said.
S&P also said that Nigeria’s current account surplus is expected to improve to 5.8 percent of gross domestic product (GDP) in 2026, from 4.8 percent in 2025, supported largely by operations at the Dangote refinery.
The agency noted that the refinery, which has ramped up capacity to about 650,000 barrels per day (bdp), would help strengthen Nigeria’s external position by reducing fuel imports and supporting exports of refined petroleum products.
S&P said Nigeria’s debt servicing burden has also moderated, with the country’s debt-to-revenue ratio projected to decline to 33.8 percent in 2026, from about 50 percent in 2023.
The company said tax reforms and improved remittances of petroleum revenues to the federation account are supporting fiscal revenue growth.
“The government has ruled out the reintroduction of subsidies on refined petroleum products, in order to avoid a return to larger budgetary deficits and drains on foreign currency liquidity,” S&P said.
“We forecast interest expenditure to average 21.4% of revenue until 2029, down from 39.0% in 2023.”
However, S&P warned that the upcoming 2027 general elections could cause a temporary widening of the general government deficit to over 4 percent of GDP due to increased infrastructure and election-related spending.
The rating agency also warned that high inflation, poverty, and weak socioeconomic conditions remain major risks to Nigeria’s economic outlook.
S&P projected inflation to average 17.7 percent in 2026 before easing to below 10 percent by 2028.
The organisation said rising fuel prices linked to global oil market developments could sustain inflationary pressures and weigh on household incomes.
The agency noted that Nigeria’s FX reserves rose to about $50 billion in March 2026, compared to $33 billion in 2023, supported by exchange-rate reforms, reduced imports, higher oil output, and increased refining capacity.
S&P said it could raise Nigeria’s ratings further over the next 12 to 24 months if fiscal reforms continue to improve government revenue and reduce external imbalances.
“If fiscal outcomes improve significantly, either due to fiscal consolidation or structurally higher revenue, resulting in lower debt service costs,” the rating firm said.
However, S&P warned that a reversal of key reforms, widening fiscal deficits, or rising debt-service costs could lead to a downgrade.
Reacting to the ratings, Taiwo Oyedele, minister of finance and coordinating minister of the economy, says the federal government has welcomed the decision by S&P Global Ratings to upgrade Nigeria’s sovereign credit rating from ‘B-’ to ‘B’ with a stable outlook.
In a statement on Friday, Oyedele said the latest rating action reinforces growing international confidence in Nigeria’s economic reforms and medium-term growth prospects.
The minister said the upgrade follows similar positive rating actions by Fitch Ratings and Moody’s Ratings earlier in 2025.
Oyedele said the assessment shows that reforms introduced under the administration of Tinubu are beginning to yield results.
“These independent assessments collectively affirm that the difficult but necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu are yielding measurable results and laying the foundation for a more stable, transparent, and resilient economy,” he said.
He said S&P highlighted improvements in Nigeria’s external position, stronger balance of payments dynamics, increased oil production, expanding domestic refining capacity, and the liberalisation of the FX market.
The minister said the agency also recognised fiscal reforms aimed at broadening the tax base, improving revenue mobilisation, enhancing transparency, and strengthening debt sustainability.
“The upgrades by Fitch, Moody’s, and now S&P send a strong signal to global investors, development partners, financial markets, and the international business community that Nigeria is regaining macroeconomic credibility and restoring confidence in the management of its economy,” Oyedele said.
The minister reiterated the government’s commitment to fiscal discipline and market-driven reforms, stressing that the administration will not reintroduce subsidies.
“We have maintained our position against the reintroduction of inefficient fuel subsidies which historically created significant fiscal distortions, incentivised smuggling, weakened foreign exchange liquidity, and diverted scarce public resources away from critical national priorities,” he said.
Oyedele also said the federal government remains committed to policies that support free enterprise, private investment, and a stable business environment.
Describing the ratings upgrade as encouraging, the minister acknowledged that major economic challenges remain.
“We are focused on addressing inflationary pressures, improving food security, expanding decent job opportunities, and ensuring that economic growth translates into meaningful and inclusive prosperity for all Nigerians,” Oyedele said.
He added that the improved ratings outlook would strengthen Nigeria’s ability to attract investments and secure financing on more favourable terms.
In November 2025, S&P revised Nigeria’s outlook to positive from stable.
