Higher oil prices, refining gains and economic reforms boost investor confidence
Abuja — S&P Global Ratings has upgraded Nigeria’s sovereign credit rating to ‘B’ from ‘B-’, marking the country’s first rating upgrade in 14 years and delivering a major endorsement of President Bola Tinubu’s economic reform programme.
The ratings agency said the upgrade reflects improving external balances, stronger oil-sector dynamics, and policy reforms aimed at stabilising Africa’s largest economy. S&P also assigned a stable outlook.
The decision, announced on Friday, represents Nigeria’s first sovereign rating upgrade by S&P since 2012.
https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3563619
According to the agency, higher global oil prices, improved domestic refining capacity, and Nigeria’s gradual emergence as a refined petroleum exporter contributed significantly to the rating improvement. S&P also cited exchange-rate liberalisation and broader macroeconomic reforms as key factors supporting the upgrade.
The development follows a gradual improvement in Nigeria’s credit outlook over the past year. In late 2025, S&P revised Nigeria’s outlook from stable to positive while maintaining the country’s ‘B-/B’ ratings, signalling growing confidence in the government’s fiscal and monetary reforms.
At the time, the agency pointed to improving external reserves, tighter monetary coordination, and stronger reform momentum, despite persistent structural weaknesses including low per capita income, elevated debt-servicing costs, and institutional constraints.
President Bola Tinubu’s administration launched a series of politically sensitive reforms after assuming office in 2023, including the removal of fuel subsidies, exchange-rate unification, tax restructuring, and banking sector recapitalisation measures.
While the reforms initially triggered inflationary pressures and a sharp rise in living costs, international financial institutions and ratings agencies have increasingly argued that the measures are beginning to restore macroeconomic stability.
Nigeria’s external position has also strengthened in recent months. Gross foreign reserves rose to nearly $44 billion by late 2025, while the country’s removal from the Financial Action Task Force (FATF) grey list helped improve investor sentiment and support foreign exchange inflows.
Analysts say the S&P upgrade could help lower Nigeria’s borrowing costs on international capital markets, improve access to external financing, and reinforce longer-term confidence in the naira.
However, observers caution that significant vulnerabilities remain. Nigeria’s rating remains several levels below investment grade, reflecting ongoing concerns around fiscal pressure, debt servicing, insecurity, infrastructure deficits, and weak household purchasing power.
S&P also warned that reform setbacks or deterioration in Nigeria’s repayment capacity could reverse recent gains.
Still, the upgrade marks one of the clearest international validations yet of the Tinubu administration’s economic restructuring agenda and may strengthen the government’s argument that its reforms, though painful, are beginning to produce measurable macroeconomic results.
— TMN Economics Desk | May 16, 2026