S&P Upgrades Nigeria’s Credit Rating to ‘B’, Cites Reforms and Oil Gains

S&P Global Ratings has upgraded Nigeria’s long-term foreign and local currency sovereign credit ratings to ‘B’ from ‘B-’. The US agency announced the move on Friday, citing improvements in the country’s macroeconomic profile, external position, and ongoing economic reforms.

S&P affirmed Nigeria’s short-term ratings at ‘B’ with a stable outlook. The agency said higher oil production and prices, increased domestic refining capacity, and the liberalisation of the foreign exchange market in 2023 have strengthened economic growth and the balance of payments.

“On May 15, 2026, S&P Global Ratings raised its long-term foreign and local currency sovereign credit ratings on Nigeria to ‘B’ from ‘B-’ and affirmed our ‘B’ short-term ratings,” the agency stated. “At the same time, we raised our long- and short-term Nigeria national scale ratings on the sovereign to ‘ngA+/ngA-1’ from ‘ngBBB+/ngA-2’. The outlook is stable.”

S&P said Nigeria’s improved creditworthiness followed three years of sustained structural reforms, particularly exchange rate liberalisation. This has improved access to foreign currency and supported investor confidence. The agency also noted that reforms to broaden the tax base and increase petroleum revenue transfers to the Federal Government have strengthened fiscal performance.

It projected Nigeria’s debt-to-revenue ratio would decline to 338 per cent in 2026 from about 500 per cent in 2023. S&P said the government’s decision not to reintroduce fuel subsidies has helped prevent wider budget deficits and preserve foreign exchange liquidity.

However, the agency warned that rising fuel prices linked to global oil market pressures and the Middle East conflict are adding to inflationary pressures ahead of the 2027 general elections. S&P projected inflation to average 17.7 per cent in 2026 before falling below 10 per cent by 2028.

It highlighted the impact of the Dangote Refinery and increased domestic refining capacity. This development will strengthen Nigeria’s current account position and reduce dependence on imported refined petroleum products. S&P forecast Nigeria’s current account surplus to rise to 5.8 per cent of GDP in 2026 from 4.8 per cent in 2025.

The stable outlook reflects a balance between Nigeria’s improved external position and growth prospects and persistent structural challenges such as low tax revenue, inflation, poverty, unemployment, and security concerns.

“We expect President Bola Tinubu’s administration will continue to advance economic and fiscal reforms,” the report stated.

Minister Welcomes Upgrade, Says Reforms Working

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, welcomed the rating. In a post on X early Saturday, he said it followed similar upgrades by Fitch Ratings and Moody’s in 2025. He said the positive ratings from all three global firms reflect growing international confidence in the reforms under Tinubu.

“These independent assessments collectively affirm that the difficult but necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu, GCFR, are yielding measurable results and laying the foundation for a more stable, transparent, and resilient economy,” Oyedele said.

He said the ratings send a strong signal to global investors, development partners, financial markets, and the international business community that Nigeria is regaining macroeconomic credibility.

The minister reaffirmed the government’s opposition to reintroducing fuel subsidies, describing them as inefficient and fiscally distortive. “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.

He acknowledged that challenges such as inflation, food insecurity, unemployment, and the need for inclusive growth still require urgent attention. “While these positive ratings developments are encouraging, we recognise that the work ahead remains substantial,” he said.

Oyedele thanked Nigerians for their resilience, patience, and support throughout the reform process. He expressed optimism that the improved ratings outlook would help attract investment and enable the country to secure financing on more favourable terms.