S&P Upgrades Nigeria’s Credit Rating, Credits Dangote Refinery’s Success

S&P Global has upgraded Nigeria’s sovereign credit rating, pointing directly to the Dangote Refinery as a key reason. The agency raised the country’s long-term foreign and local currency ratings to “B” from “B-”. It said the privately owned refinery has cut Nigeria’s reliance on imported fuel.

Refinery Operations Drive Fiscal Gains

In its latest assessment, S&P highlighted the refinery’s near-full capacity of 650,000 barrels per day. The agency noted that this has improved foreign exchange savings, fuel supply stability, and state revenues. It said these factors have strengthened Nigeria’s fiscal and external resilience.

“Significant refining capacity is now also online; Dangote Industries Ltd.’s large-scale refinery and petrochemical complex has ramped up to near its maximum capacity of 650,000 barrels per day,” the report stated.

Current Account Surplus to Improve

S&P projected Nigeria’s current account surplus would rise to 5.8 per cent of GDP in 2026 from 4.8 per cent in 2025. The agency said domestic refining and hydrocarbon exports are supporting this growth. It also said the refinery ensures the availability of refined fuel, gas, and fertiliser for the local market. This provides a buffer against global supply disruptions from Middle East tensions.

The agency added that reduced fuel imports, the removal of fuel subsidies, exchange rate liberalisation, and higher oil production have all helped Nigeria’s external position. Foreign exchange reserves have climbed from about $33 billion in 2023 to nearly $50 billion by early 2026. S&P said lower demand for imported refined products, thanks to the Dangote Refinery, played a part.

Broader Impact on Industrialisation

S&P noted that Nigeria is moving from being a crude oil exporter to a producer and exporter of refined petroleum products. The agency disclosed that Dangote Industries plans to study expanding capacity to about 1.4 million barrels per day from the current 650,000 barrels per day. It said this expansion, along with rehabilitation of other local refineries, could boost Nigeria’s economy and balance of payments further.

While global crude prices and market pricing still affect domestic fuel costs, S&P maintained that increased local refining gives Nigeria greater energy security. The agency also linked the improving outlook to reforms since 2023, including exchange rate liberalisation, fiscal changes, higher petroleum revenue remittances, and better oil production from improved security in the Niger Delta.

Growth Outlook Remains Firm

S&P said Nigeria’s economic growth should stay firm despite inflation. Reforms continue to support investor confidence and non-oil sector expansion. The stable outlook reflects a balance between Nigeria’s improving external position and ongoing challenges like a narrow tax base, high inflation, and low formal employment.