Nigeria’s sovereign credit profile has received a significant endorsement after S&P Global Ratings upgraded the country’s long term foreign and local currency sovereign rating to B from B minus, while revising the outlook from positive to stable. The decision reflects growing confidence in the country’s macroeconomic direction following a period of substantial fiscal and monetary adjustment.
In its latest assessment published on 15 May, S&P stated that reforms introduced since 2023, including the liberalisation of the foreign exchange market and efforts to strengthen domestic energy production, have contributed to improved balance of payments conditions and stronger growth prospects. The agency also noted that rising oil production levels and expanding refining capacity are expected to support external earnings and reduce structural vulnerabilities over the medium term.
The ratings upgrade places Nigeria among a number of African economies seeking to reposition themselves within global financial markets through domestic reform rather than external dependency. Analysts across the continent have increasingly argued that sovereign assessments should take greater account of local economic resilience, demographic capacity, and long term industrial potential rather than focusing narrowly on short term volatility.
According to Reuters, S&P projected that Nigeria’s real GDP per capita could grow by an average of 1.4 per cent annually through to 2029. This would mark a reversal from the average contraction recorded over the previous decade. The agency attributed the anticipated improvement to a combination of policy adjustment, stronger investor confidence, and enhanced energy sector output.
Nigeria’s economic reforms have unfolded within a complex international environment marked by geopolitical instability, fluctuating commodity prices, and tightening financial conditions in major economies. The recent escalation of tensions involving Iran, Israel, and the United States has contributed to renewed inflationary pressures globally, particularly through higher fuel and transport costs. Nevertheless, S&P observed that Nigeria’s position as both a crude oil exporter and an emerging producer of refined petroleum products may provide a degree of insulation from some regional spillover effects.
The country’s inflation trajectory remains a central area of scrutiny. Data released earlier this year indicated that consumer inflation had eased for eleven consecutive months before rising again in March and April amid higher fuel and food costs. Policymakers at the Central Bank of Nigeria have maintained a relatively tight monetary stance in an effort to stabilise prices and strengthen confidence in the naira.
In April, the World Bank projected that Nigeria’s economy could expand by approximately 4.2 per cent in 2026, while encouraging authorities to continue fiscal discipline, avoid broad based fuel subsidies, and preserve gains from higher oil revenues. The institution also stressed the importance of directing windfall earnings towards savings and productive investment to improve long term economic resilience.
The latest move by S&P follows similar actions by Fitch Ratings and Moody’s over the past year, both of which cited improvements in Nigeria’s external position and fiscal management. While credit upgrades do not immediately alter living conditions for ordinary citizens, they often influence borrowing costs, investor sentiment, and perceptions of economic stability in international markets.
Across Africa, debates continue regarding the role and influence of international ratings agencies in shaping access to capital and development financing. Economists and policymakers have repeatedly called for a more balanced evaluation framework that reflects the diversity of African economies and recognises local institutional reforms that may not always align neatly with external market expectations.
