Why?

The rating firm cited improvements in the country’s macroeconomic profile, external position, and ongoing economic reforms.

The US-based global ratings agency announced the upgrade on Friday while affirming Nigeria’s short-term ratings at “B” with a stable outlook.

According to S&P, higher oil production and prices, increased domestic refining capacity, and the liberalisation of the foreign exchange market in 2023 have strengthened Nigeria’s economic growth and balance of payments position.

“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.

“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.,” the agency stated.

S&P said Nigeria’s improved creditworthiness followed “three years of sustained structural reforms,” particularly the liberalisation of the exchange rate, which it said had improved access to foreign currency and supported investor confidence.

The agency noted that reforms aimed at broadening the tax base and increasing petroleum revenue transfers to the Federal Government had also strengthened fiscal performance.

It projected that Nigeria’s debt-to-revenue ratio would decline to 338 per cent in 2026 from about 500 per cent in 2023.

The ratings agency said the Federal Government’s decision not to reintroduce fuel subsidies had helped prevent wider budget deficits and preserve foreign exchange liquidity.

However, it warned that rising fuel prices linked to global oil market pressures and the Middle East conflict were contributing to inflationary pressures ahead of the 2027 general elections.

S&P projected inflation to average 17.7 per cent in 2026 before declining to below 10 per cent by 2028.

The agency also highlighted the impact of the Dangote Refinery and increased domestic refining capacity on Nigeria’s economy, saying the development would strengthen the country’s current account position and reduce dependence on imported refined petroleum products.

It 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 agency said the stable outlook reflected 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.

Reacting, Taiwo Oyedele, the minister of Finance and Coordinating Minister of the Economy, welcomed the rating and said it followed similar upgrades by Fitch Ratings and Moody’s in 2025.

In a post on X early Saturday, the minister said the positive ratings, now by the three global firms, reflected growing international confidence in the economic reforms implemented 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 positive ratings by S&P, Fitch, and Moody’s sent “a strong signal to global investors, development partners, financial markets, and the international business community that Nigeria is regaining macroeconomic credibility.”

The minister also reaffirmed the government’s opposition to the reintroduction of 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 required urgent attention.

“While these positive ratings developments are encouraging, we recognise that the work ahead remains substantial,” he said.

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

(Source: Punchng.com)

The rating agency announced the update on November 14, 2025, while affirming the country’s sovereign rating at “B-/B”.

The long-term “B-” rating indicates Nigeria’s current ability to meet its financial obligations, but also shows economic vulnerability and uncertainty. The short-term “B” rating signifies high risk, with current capacity to meet short-term debts.

According to S&P, “The monetary, economic, and fiscal reforms being implemented by Nigerian authorities will yield positive benefits over the medium term.”

The revision follows other recent assessments including Moody’s upgraded Nigeria by one-notch to “B3” in May, citing, showing improvements in external and fiscal fundamentals while Fitch maintained its “B” rating with a “stable” outlook last month.

Key reforms driving the growth include the 2023 removal of fuel subsidy and unification of foreign exchange windows, allowing market forces to determine the naira’s value.

If sustained, these reforms could support long-term economic expansion, despite implementation hurdles and oil price volatility.

Nigeria has recently tapped the debt market, raising $2.35 billion through a Eurobond issuance, oversubscribed by over 450%, indicating strong international demand.

Global stakeholders, including Dr. Ngozi Okonjo-Iweala, WTO director-general, have commended the administration’s reform drive, while stressing the need for accompanying social protection measures.

Speaking to the media after her meeting with the president in August 2025, she said,

“We think that the President and his team have worked hard to stabilise the economy. You cannot really improve an economy unless it is stable. So, he has to be given the credit for the stability of the economy. The reforms have been in the right direction.

“What is needed next is growth; we now need to grow the economy, and we need to put in social safety nets so that people who are feeling the pinch of the reforms can also have some support to weather the hardship. That’s the next step.

Mrs. Oritsemeyiwa Eyesan, NNPC Ltd’s executive vice president, Upstream, disclosed this during a Panel Session at the ongoing 2024 CERAWeek Conference in Houston, the United States on Tuesday.

Eyesan, whose session addressed the theme,

“What are the Choices for Upstream Strategies?” said Nigeria is a predominantly gas-rich country which boasts of over 200TCF of gas that can be leveraged for the country’s industrialisation and economic development.

She noted that NNPC Ltd plans to deepen gas utilization domestically for industrialization and ensuring that the entire country feels and optimizes the use of the resource.

She said the Company is vigorously opening avenues for infrastructural gas development through various gas projects spread across the country.

“Our focus is how do we move from predominantly oil player to gas player and not just for gas for the sake of gas but gas for power generation, and for industrialization, “she stated.

Eyesan observed that the NNPC Ltd is also focused on emission reduction and gas flare-out.

“We want to capture all gas flared, utilize it and for domestic use and and ultimately, increase our energy transition footprints,” she said.

“NNPC is keying into the government agenda of using gas as a transition fuel and for us, we want to ensure not only the domestic gas market, but we also expand that to the region and internationally,” she said.

While calling on African countries to collaborate with one another in order to ensure even distribution of energy resources, Eyesan said collaboration is key as not all countries within the sub-region are endowed with equal with equal proportion of energy resources.

“For us to ensure that we continue to subsist within the sub-region, we must be willing to work collaboratively and ensure that there is even distribution of energy resources we have across the sub-region.”

On energy transition, Eyesan stated that the subject has evolved over the years, adding that for Sub-Saharan Africa, the narrative has been on how to address the energy poverty issue while for Nigeria, the NNPC Ltd. will continue to look at areas where it has competitive advantage to define the strategy.

Other energy experts on the panel are the Chief Upstream Strategist, Energy, S&P Global Commodity Insights, Bob Fryklund; President of Pathways Alliance, Kendall Dilling and the Executive Vice President, Exploration and Production International, Equinor, Philippe Mathieu.