LAGOS — S&P Global Ratings on Friday revised Nigeria’s sovereign outlook to positive from stable, affirming the country’s long- and short-term foreign- and local-currency rating at B–/B. The upgrade underscores global confidence in President Bola Tinubu’s economic reform agenda.
In a statement, S&P said the country’s “monetary, economic and fiscal reforms … will yield positive benefits over the medium term.”
The reforms include the removal of a costly petrol subsidy, liberalization of the foreign exchange market and the elimination of currency‑trading restrictions. Additional efforts to boost non‑oil revenue and expand domestic refining capacity also contributed to the upgrade.
S&P noted that, if sustained, these reforms could strengthen Nigeria’s fiscal position and reduce its reliance on volatile oil earnings.
Broader Support from Credit-Rating Agencies
S&P’s move follows a similar outlook from other major rating agencies. In May 2025, Moody’s upgraded Nigeria’s government bond rating from Caa1 to B3, citing improved external reserves and fiscal discipline.
Meanwhile, Fitch has maintained its B rating but also raised its outlook, pointing to reforms including a new electronic foreign exchange‑matching platform and tighter monetary policy. According to Fitch, these initiatives have reduced market distortions and boosted investor confidence.
Funding Reforms via Global Markets
To finance its budget deficit, Nigeria recently raised $2.35 billion in a Eurobond issuance. The debt sale was reportedly oversubscribed, a signal that international investors are increasingly confident in the country’s policy direction.
In addition, the government is reportedly exploring a $500 million sovereign sukuk (Islamic bond) to diversify its debt portfolio. Analysts view the sukuk, along with future green bonds and diaspora bonds, as part of a broader strategy to tap new and more sustainable funding sources.
Macro Gains, But Risks Remain
The International Monetary Fund (IMF) has welcomed Nigeria’s reform path. In a July 2025 Article IV report, the IMF noted improvements in macroeconomic stability and foreign reserves. The fund forecast real GDP growth of about 3.4% in 2025, underpinned by stronger oil output and a more vibrant services sector.
Still, S&P warned that risks remain. Inflation is expected to stay high — potentially above 20% in 2025 and 2026 — before gradually easing toward 13% by 2028. Persistent inflation could erode consumer purchasing power and weigh on the reform effort.
Oil‑price volatility is also a major risk. As Nigeria relies heavily on oil revenue, a sustained drop in global crude prices could undermine both its fiscal surplus and its external stability.
Political backlash is another concern. The dismantling of the petrol subsidy, while fiscally necessary, could fuel public discontent. Analysts caution that weak implementation of reforms or growing social unrest could derail progress.
There are also questions about budget execution. Some critics say capital spending has lagged, and that delayed or inconsistent allocations could strain Nigeria’s economic recovery.
A Turning Point for Nigeria?
S&P said that if Nigeria can maintain momentum on reform, improve its external buffers and sustain credible fiscal management, further credit upgrades are possible.
For Nigeria, the positive outlook may mark a turning point. After years of subsidy burdens and foreign exchange distortions, the government’s recent moves suggest a more sustainable economic course. Investor interest in its Eurobond issuance reflects growing belief in the country’s long-term potential.
Nevertheless, the road ahead will demand more than policy announcements. Implementation, accountability and continued political will will determine whether Nigeria’s reform ambitions translate into lasting fiscal strength
Bottom line: S&P’s shift to a positive rating outlook reflects real progress. But for reforms to deliver long-term payoffs, Nigeria must execute consistently and navigate economic and political headwinds.
Godwin Okafor ✔
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.
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