Introduction
Global ratings agency S&P Global Ratings has upgraded Nigeria’s long-term foreign and local currency sovereign credit ratings from ‘B-’ to ‘B’ with a stable outlook.
The agency cited improvements in Nigeria’s foreign exchange market, rising oil production, increased refining capacity, and ongoing economic reforms introduced by the administration of Bola Ahmed Tinubu.
The announcement was made on Friday, May 16, 2026.
Why S&P Upgraded Nigeria’s Rating
According to S&P, Nigeria’s economic position has improved following several structural reforms carried out over the last three years.
The agency highlighted:
- Liberalisation of the foreign exchange market in 2023
- Improved oil production
- Increased domestic refining capacity
- Better foreign exchange liquidity
- Stronger investor confidence
S&P stated that these reforms are helping Nigeria strengthen its balance of payments and improve economic growth.
Dangote Refinery Boosts Nigeria’s Outlook
S&P noted that the operations of the Dangote Refinery played a major role in improving Nigeria’s economic outlook.
According to the agency, the refinery’s growing production capacity of about 650,000 barrels per day is expected to:
- Reduce fuel imports
- Increase exports of refined petroleum products
- Improve Nigeria’s external reserves
- Support economic stability
The ratings agency projected that Nigeria’s current account surplus could rise to 5.8 percent of GDP in 2026 from 4.8 percent in 2025.
Nigeria’s Debt Burden Expected to Decline
S&P also projected an improvement in Nigeria’s debt servicing position.
The agency said Nigeria’s debt-to-revenue ratio could fall to 33.8 percent in 2026, compared to nearly 50 percent in 2023.
According to the report, reforms in tax administration and improved remittance of petroleum revenues are helping to strengthen government finances.
The agency also noted that the federal government has ruled out the return of fuel subsidies in order to avoid pressure on public finances and foreign exchange reserves.
Inflation and Economic Risks Remain
Despite the positive rating upgrade, S&P warned that Nigeria still faces major economic challenges.
The agency projected inflation to average 17.7 percent in 2026 before gradually dropping below 10 percent by 2028.
S&P also identified:
- Rising fuel prices
- Poverty
- Weak socioeconomic conditions
- Election-related spending ahead of 2027
as possible risks to Nigeria’s economic outlook.
The agency warned that a reversal of key reforms or rising debt-service costs could negatively affect future ratings.
Government Reacts to Upgrade
Reacting to the development, Taiwo Oyedele welcomed the upgrade and described it as a sign of growing international confidence in Nigeria’s economy.
According to him, the rating improvement reflects the impact of reforms introduced under President Tinubu’s administration.
He stated that the government remains committed to:
- Fiscal discipline
- Market-driven reforms
- Improved revenue generation
- Free enterprise
- Stable economic policies
Oyedele added that the improved ratings could help Nigeria attract more foreign investment and secure financing on better terms.
Conclusion
The latest upgrade by S&P Global Ratings signals growing international confidence in Nigeria’s economic reforms and recovery efforts.
Although challenges such as inflation and poverty remain, analysts believe continued reforms, increased oil production, and stronger fiscal management could further improve Nigeria’s economic outlook in the coming years.