S&P Global Ratings has upgraded Nigeria’s sovereign outlook to “positive” from “stable,” while affirming the country’s long-term and short-term credit ratings at “B-/B.” The move marks a significant milestone in Nigeria’s economic journey, reflecting growing confidence in its reform agenda and macroeconomic direction. This Nigeria S&P Global Ratings upgrade signals what analysts are calling the most optimistic external assessment of the country’s economy in over a decade.
In its latest review, the agency cited sustained improvements in Nigeria’s external, fiscal, monetary, and economic policies as key drivers behind the decision. “We think authorities are taking steps to improve the economy’s growth prospects and macroeconomic resilience,” S&P stated, highlighting President Bola Tinubu’s reform momentum since mid-2023—including the liberalisation of the foreign exchange market, removal of petrol subsidies, tighter fiscal discipline, and enhanced revenue mobilisation efforts.
These reforms, though initially disruptive, have begun to yield measurable results. Foreign exchange liquidity has improved, the naira has stabilized against major currencies, and investor sentiment is gradually recovering. Oil production has rebounded, supporting export earnings and bolstering foreign reserves. Together, these developments have strengthened Nigeria’s external position and reduced vulnerabilities that previously constrained investor confidence.
S&P now projects Nigeria’s economy to grow at an average rate of 3.7% between 2025 and 2028, up from its earlier forecast of 3.2%. This upward revision reflects expectations of stronger private sector activity, improved business conditions, and continued progress on structural reforms. Inflation, which peaked above 30%, is also expected to ease steadily, reaching around 13% by 2028, supported by tighter monetary policy and improved supply-side dynamics.
Despite these gains, S&P acknowledged persistent challenges: Nigeria’s low GDP per capita, high debt-service burden, and still-fragile revenue base remain constraints on long-term creditworthiness. The “B-” rating continues to reflect these structural weaknesses, even as the positive outlook underscores a clear shift in trajectory.
The agency warned that the outlook could revert to “stable” if reforms stall, debt pressures escalate, or domestic financial markets lose appetite for government borrowing. Capital flight driven by renewed policy uncertainty or global risk shifts also poses a downside risk.
However, S&P left the door open for a potential rating upgrade within the next 12 months—should Nigeria exceed growth expectations and further strengthen its fiscal and external indicators. Such a move would mark a pivotal step toward investment-grade status and could unlock cheaper financing, attract foreign portfolio inflows, and reduce borrowing costs for both public and private sectors.
The Nigeria S&P Global Ratings upgrade comes amid broader signs of economic stabilization. After years of currency controls and subsidy distortions, markets are responding positively to a more transparent and market-driven approach. Multinational investors, development partners, and regional institutions are watching closely to see whether this momentum can be sustained through political and economic cycles.
For now, the message from Wall Street to Abuja is clear: Nigeria is back on the radar—not yet as a safe bet, but increasingly as a story of transformation worth watching.
As one analyst put it: “This isn’t just a technical upgrade. It’s a vote of confidence in Nigeria’s new economic path.”
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