S&P Global Ratings has reaffirmed Nigeria’s sovereign credit rating at B-, keeping a positive outlook that reflects cautious optimism about the country’s economic recovery and ongoing fiscal reforms.
This was confirmed in the rating agency’s latest assessment shared with Nairametrics on Tuesday.
The decision signals growing confidence in Nigeria’s ability to manage economic challenges while laying the foundation for sustainable growth and improved creditworthiness.
What the report is saying
S&P’s detailed assessment evaluates Nigeria’s creditworthiness across multiple dimensions:
- Institutional Assessment: 5
- Economic Assessment: 6
- External Assessment: 5
- Fiscal Assessment – Budget Performance: 6
- Fiscal Assessment – Debt: 5
- Monetary Assessment: 5
These scores highlight strengths in Nigeria’s economic performance and fiscal budget management, while also pointing to areas where institutional capacity and debt management still require improvement.
The ratings underscore the need for continued reform to achieve stronger and more sustainable growth.
The rating agency noted that the positive outlook reflects improvements in external, economic, fiscal, and monetary results. Despite Nigeria’s relatively low GDP per capita and narrow fiscal revenue base, S&P recognizes the government’s efforts to diversify revenue streams and stabilize the macroeconomy.
- “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,” the agency added.
- “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.”
Key drivers of this optimism include better 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.
Backstory
This reaffirmation follows S&P’s November 2025 decision to upgrade Nigeria’s outlook from stable to positive while keeping the B-/B foreign and local currency ratings.
At the time, the positive outlook was seen as an endorsement of Nigeria’s reform agenda and improving macroeconomic fundamentals, even amidst global economic uncertainties.
More insights
S&P signaled that an upgrade could be possible within the next 12 months if positive trends persist. Any rating improvement would hinge on sustained economic growth beyond current forecasts, expansion of the government’s revenue base, and effective debt management to keep costs manageable.
S&P also projected Nigeria’s economic growth at 3.76 percent in 2026, followed by 3.57 percent in both 2027 and 2028.
- 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.
- An upgrade would signal reduced borrowing costs and increased investor interest, supporting long-term growth and development.
Despite the positive outlook, S&P warned of potential setbacks that could undermine progress. Delays in critical reforms, rising fiscal deficits, and growing debt burdens could weaken Nigeria’s credit profile.
- Domestic financial markets’ limited capacity to absorb local currency debt could trigger capital outflows.
- Structural challenges, including weak statistical data collection and public financial management, remain obstacles to higher sovereign ratings.
Addressing these challenges will be key to maintaining credit stability and building long-term investor confidence.
What you should know
In October 2025, Fitch Ratings affirmed Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B’ with a Stable Outlook, citing improved foreign exchange liquidity and ongoing monetary and fiscal reforms.
In its review released, the ratings agency said Nigeria’s rating is supported by its large economy, a liquid domestic debt market, and substantial oil and gas reserves.
