LAGOS, May 16 – Credit rating agency, S&P Global Ratings upgraded Nigeria’s long-term sovereign credit rating to B from B- on Friday, citing improving creditworthiness supported by economic reforms, stronger oil production and rising refining capacity.
The ratings agency also revised Nigeria’s outlook to stable from positive, pointing to stronger external balances and improving growth prospects.
According to S&P, higher crude production, elevated oil prices and the expansion of domestic refining capacity have strengthened Nigeria’s balance-of-payments position and broader economic outlook.
The agency also highlighted the government’s 2023 decision to liberalize the exchange rate as a key factor supporting economic adjustment and investor confidence.
“Nigeria is less exposed to the spillover effects from the Middle East conflict than most regional peers,” S&P said, citing the country’s status as a major crude exporter and emerging producer of refined petroleum products.
The upgrade comes as Nigeria navigates renewed inflationary pressures linked to the Iran war, which has pushed up global fuel and food prices across several emerging markets.
Nigeria’s inflation rate accelerated for a second consecutive month in April after previously slowing for 11 straight months. Rising transport and energy costs have continued to feed into broader consumer prices.
Despite the inflation risks, the World Bank said in April that Nigeria’s economy is projected to expand by about 4.2% in 2026, supported by reforms in the energy and foreign exchange markets.
The World Bank also urged authorities to save gains from higher oil revenues, maintain tight monetary policy and avoid a return to broad fuel subsidies in order to contain inflationary pressures.
S&P said it expects Nigeria’s real GDP per capita growth to average 1.4% annually through 2029, reversing a decade-long average contraction of about 1%.
The latest rating action follows similar upgrades from Fitch Ratings and Moody’s Ratings over the past year, as international agencies acknowledged improvements in Nigeria’s fiscal and external positions under the administration of President Bola Tinubu.
