S&P Global Ratings has reaffirmed Nigeria’s sovereign credit rating at B-, with a positive outlook that reflects cautious optimism about the country’s economic recovery and ongoing fiscal reforms.
The rating agency’s latest assessment released on Tuesday reflected growing confidence in Nigerian government’s capacity to address economic challenges and laying strong foundation for the nation’s sustainable growth and improved creditworthiness.
The S&P assessment rated Nigeria’s creditworthiness across multiple dimensions, including Institutional Assessment: 5; Economic Assessment: 6; External Assessment: 5; Fiscal Assessment – Budget Performance: 6; Fiscal Assessment – Debt: 5; and Monetary Assessment: 5.
The assessment scorecard highlighted strengths in Nigeria’s economic performance and fiscal budget management even as it also identified areas where institutional capacity and debt management still require improvement.
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The S&P ratings also underscored the need for the Nigerian government to sustain ongoing reforms in order to achieve stronger and more sustainable growth of the economy.
In addition, the ratings agency noted that the positive outlook of the economy reflected improvements in external, economic, fiscal, and monetary results.
According to the rating agency’s latest assessment data, despite the country’s relatively low GDP per capita and narrow fiscal revenue base, the government’s efforts to diversify revenue streams and stabilize the macro-economy remains worthy of note .
S&P clarified: “The positive outlook reflects improving external, economic, fiscal, and monetary results.
“We could raise our ratings over the next 12 months if Nigeria’s economic performance continues to exceed our forecasts, alongside more entrenched fiscal and external gains.
“We could revise the outlook to stable if risks to Nigeria’s reform program implementation arise or if capacity to repay commercial obligations weakens.
“This could occur, for instance, from higher fiscal deficits or debt-servicing needs, or because domestic financial markets are unwilling to absorb additional local currency debt. Confidence-sensitive capital outflows could also pose downside risks”, the rating agency added.
It listed key drivers of this optimism as including more robust external balances supported by rising oil revenues, stronger monetary policy frameworks to control inflation, and ongoing fiscal discipline that has helped reduce budget deficits in recent quarters.
S&P indicated that an upgrade of the latest rating could be possible within the next 12 months if positive trends persisted, particularly expansion of the government’s revenue base, and effective debt management to keep costs manageable.
This is even as it also projected Nigeria’s economic growth at 3.76 percent in 2026, followed by 3.57 percent in both 2027 and 2028.
The rating agency maintained that a strengthened fiscal governance and transparency in economic data reporting would bolster investor confidence, improved macroeconomic fundamentals could make Nigeria a more attractive destination for foreign investment, and that an upgrade would signal reduced borrowing costs and increased investor interest, supporting long-term growth and development.
Despite the positive outlook, it cautioned on potential setbacks that could undermine progress, namely delays in critical reforms, rising fiscal deficits, and growing debt burdens could weaken Nigeria’s credit profile.
Other risks it listed are domestic financial markets’ limited capacity to absorb local currency debt could trigger capital outflows, and structural challenges, including weak statistical data collection and public financial management, remain obstacles to higher sovereign ratings.
S&P stressed that addressing these challenges would be key to maintaining credit stability and building long-term investor confidence in the nation’s economy.
It would be recalled that last October Fitch Ratings, another ratings agency, had affirmed Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B’ with a Stable Outlook, hinging its assessment on improved foreign exchange liquidity and ongoing monetary and fiscal reforms.
