S&P maintains Nigeria’s sovereign credit standing at B- with optimistic outlook

S&P World Rankings has reaffirmed Nigeria’s sovereign credit standing at B-, protecting a optimistic outlook that displays cautious optimism concerning the nation’s financial restoration and ongoing fiscal reforms.

This was confirmed within the score company’s newest evaluation shared with BusinessTimes on Tuesday.

The choice indicators rising confidence in Nigeria’s skill to handle financial challenges whereas laying the inspiration for sustainable progress and improved creditworthiness.

What the report is saying

S&P’s detailed evaluation evaluates Nigeria’s creditworthiness throughout a number of dimensions:

• Institutional Evaluation: 5
• Financial Evaluation: 6
• Exterior Evaluation: 5
• Fiscal Evaluation – Funds Efficiency: 6
• Fiscal Evaluation – Debt: 5
• Financial Evaluation: 5

These scores spotlight strengths in Nigeria’s financial efficiency and financial funds administration, whereas additionally pointing to areas the place institutional capability and debt administration nonetheless require enchancment.

The scores underscore the necessity for continued reform to attain stronger and extra sustainable progress.

The score company famous that the optimistic outlook displays enhancements in exterior, financial, fiscal, and financial outcomes. Regardless of Nigeria’s comparatively low GDP per capita and slender fiscal income base, S&P acknowledges the federal government’s efforts to diversify income streams and stabilize the macroeconomy.

• “The optimistic outlook displays enhancing exterior, financial, fiscal, and financial outcomes.”
• “We may increase our scores over the following 12 months if Nigeria’s financial efficiency continues to exceed our forecasts, alongside extra entrenched fiscal and exterior features,” the company added.
• “We may revise the outlook to secure if dangers to Nigeria’s reform program implementation come up or if capability to repay industrial obligations weakens.
• “This might happen, as an illustration, from greater fiscal deficits or debt-servicing wants, or as a result of home monetary markets are unwilling to soak up further native foreign money debt. Confidence-sensitive capital outflows may additionally pose draw back dangers.”

Key drivers of this optimism embrace higher exterior balances supported by rising oil revenues, stronger financial coverage frameworks to manage inflation, and ongoing fiscal self-discipline that has helped cut back funds deficits in current quarters.

Backstory

This reaffirmation follows S&P’s November 2025 determination to improve Nigeria’s outlook from secure to optimistic whereas protecting the B-/B overseas and native foreign money scores.

On the time, the optimistic outlook was seen as an endorsement of Nigeria’s reform agenda and enhancing macroeconomic fundamentals, even amidst world financial uncertainties.

Extra insights

S&P signaled that an improve might be potential inside the subsequent 12 months if optimistic traits persist. Any score enchancment would hinge on sustained financial progress past present forecasts, growth of the federal government’s income base, and efficient debt administration to maintain prices manageable.

S&P additionally projected Nigeria’s financial progress at 3.76 p.c in 2026, adopted by 3.57 p.c in each 2027 and 2028.

• Strengthened fiscal governance and transparency in financial knowledge reporting would bolster investor confidence.
• Improved macroeconomic fundamentals may make Nigeria a extra enticing vacation spot for overseas funding.
• An improve would sign lowered borrowing prices and elevated investor curiosity, supporting long-term progress and improvement.

Regardless of the optimistic outlook, S&P warned of potential setbacks that would undermine progress. Delays in important reforms, rising fiscal deficits, and rising debt burdens may weaken Nigeria’s credit score profile.

• Home monetary markets’ restricted capability to soak up native foreign money debt may set off capital outflows.
• Structural challenges, together with weak statistical knowledge assortment and public monetary administration, stay obstacles to greater sovereign scores.

Addressing these challenges shall be key to sustaining credit score stability and constructing long-term investor confidence.

What you must know

In October 2025, Fitch Rankings affirmed Nigeria’s Lengthy-Time period Overseas-Foreign money Issuer Default Score (IDR) at ‘B’ with a Secure Outlook, citing improved overseas alternate liquidity and ongoing financial and financial reforms.

In its evaluate launched, the scores company stated Nigeria’s score is supported by its massive financial system, a liquid home debt market, and substantial oil and fuel reserves.