S&P upgrades Nigeria’s credit rating for the first time in 14yrs

S&P Global Ratings has raised Nigeria’s sovereign credit rating, marking the first such upgrade by the agency in 14 years.

The move signals growing international confidence in the sweeping economic reforms implemented under the current administration.

The ratings agency adjusted Nigeria’s outlook from stable to positive, citing a series of bold fiscal and monetary policy shifts.

These include the removal of the long-standing petrol subsidy and the unification of the country’s multiple exchange rate windows, measures that have been praised by international lenders for reducing the strain on the nation’s treasury.

According to the report, the upgrade reflects an improvement in Nigeria’s debt sustainability and a significant boost in foreign currency inflows.

S&P noted that while inflation remains a challenge, the central bank’s aggressive monetary tightening and the government’s efforts to increase oil production are beginning to yield tangible results in stabilizing the economy.

Analysts suggest that this upgrade will likely lower Nigeria’s borrowing costs on the international capital market, making it easier for the government to fund infrastructure projects and manage its debt obligations.

The shift is viewed as a pivotal moment for President Bola Tinubu’s economic team, which has faced intense domestic pressure over the rising cost of living associated with the reforms.

The last time S&P issued an upgrade for Nigeria was in 2012. Financial experts believe this renewed rating will serve as a catalyst for increased foreign direct investment (FDI), as global investors often look to credit ratings as a primary indicator of a country’s economic health and stability.

Despite the positive news, the agency cautioned that the rating’s future trajectory will depend on the government’s ability to maintain the momentum of its reforms, curb inflation, and ensure security in oil-producing regions to keep production levels consistent.