S&P Upgrades Nigeria’s Credit Rating for First Time Since 2012 Amid Economic Reforms

Femi Ashekun/

Nigeria has received its first sovereign credit rating upgrade in more than 14 years after global ratings agency, S&P Global Ratings, raised the country’s rating from ‘B-’ to ‘B’ with a stable outlook.

The development signals growing confidence in the nation’s economy and reform efforts.

The upgrade, announced by S&P, was driven by improved oil prices, rising crude oil production, stronger foreign exchange reserves, and Nigeria’s growing ability to refine and export petroleum products locally.

S&P also pointed to major economic reforms introduced by the Federal Government, including the removal of fuel subsidies and the liberalisation of the foreign exchange market, as key reasons behind the improved rating.

For ordinary Nigerians, a better credit rating means international investors and lenders now see the country as less risky than before.

This could help Nigeria attract more foreign investment and borrow money at slightly lower interest rates in the future.

Although Nigeria remains in the speculative, or “junk”, category used for riskier economies, analysts say the upgrade is an important sign that international financial institutions are beginning to regain confidence in the country’s economic direction.

Reacting to the development, the Federal Government described the upgrade as a major endorsement of the economic reforms being implemented under President Bola Tinubu.

In a statement, the government said the decision by S&P followed similar positive assessments earlier this year by Fitch Ratings and Moody’s Ratings, adding that the combined upgrades reflected “growing international confidence in Nigeria’s economic reform trajectory, policy consistency, and medium-term growth prospects”.

The government said S&P recognised improvements in Nigeria’s external finances, stronger balance of payments performance, increased oil production, expanding local refining capacity, and reforms aimed at stabilising the economy.

Officials also highlighted reforms designed to improve tax collection, increase government revenue, boost transparency, and reduce pressure on public debt.

According to the statement, Nigeria’s debt-to-revenue ratio has improved significantly since 2023 and is expected to decline further if current reforms are sustained.

The Federal Government insisted it would not reverse the removal of fuel subsidies, saying subsidies previously created “fiscal distortions”, encouraged smuggling, weakened foreign exchange liquidity, and drained public funds that could have been invested in critical sectors.

The government also pledged to continue supporting a market-driven economy that encourages private investment and provides a more predictable environment for businesses.

Despite the positive rating upgrade, the government acknowledged that major economic challenges remain, particularly inflation, food insecurity, unemployment, and the high cost of living facing millions of Nigerians.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, welcomed the upgrade, describing it as evidence that the country’s reform programme is beginning to produce measurable results.

He said the improved ratings from S&P, Fitch, and Moody’s would strengthen Nigeria’s reputation in global financial markets and improve the country’s ability to attract investment and access financing on better terms.

Economic experts say the upgrade could also boost investor confidence in Nigeria’s banking, energy, manufacturing, and infrastructure sectors, especially as the Dangote Refinery and other domestic refining projects begin to reduce dependence on imported fuel.