S&P Raises Nigeria’s Outlook to Positive, Affirms B-/B Rating on Reforms

By Adedapo Adesanya

S&P Global Ratings has revised its outlook on Nigeria to positive from stable, spurred by the country’s ongoing economic reforms, while the credit rating agency and also affirmed the country’s rating at B-/B.

“The monetary, economic, and fiscal reforms being implemented by Nigerian authorities will yield positive benefits over the medium term,” S&P said in a statement, dated Friday, November 14.

This extends a trend improved credit rating for Nigeria from top agencies. In May, Moody’s upgraded Nigeria’s rating by one notch to “B3” from “Caa1”, citing notable improvements in the country’s external and fiscal positions, while Fitch last month kept its “B” rating and “stable” outlook.

While the sovereign rating remains at B-/B, the improved outlook indicates that Nigeria’s reform efforts under President Bola Tinubu such as FX market liberalization, fuel subsidy removal, and fiscal consolidation, are beginning to restore investor confidence.

Further, this sentiment can attract more foreign inflows, support the Naira, and strengthen Nigeria’s position in global capital markets.

Business Post also understands it suggests the possibility of cheaper borrowing terms in the future if reforms continue to yield results.

Analysts said that, if sustained, these reforms could support long-term economic expansion, though implementation hurdles and global oil price volatility still pose risks.

Any reversal or weakening of reforms could easily cause the outlook to slip back to stable.

Recall that Nigeria has turned to debt markets to bridge fiscal gaps. The country raised $2.35 billion through a 477 per cent oversubscribed Eurobond issuance to help finance its 2025 budget deficit, while continuing to borrow domestically. The National Assembly recently approved a plan to raise N1.15 trillion locally to fund the 2025 budget.

Also, the country has exited the Financial Action Task Force (FATF) grey list, signaling that the country has made serious progress in tackling anti-money laundering (AML) and counter-terrorism financing (CFT) risks.