S&P Global Ratings has revised its outlook on Nigeria from stable to positive. At the same time, the Ratings agency affirmed its ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings on Nigeria. It also affirmed its ‘ngBBB+/ngA-2’ long- and short-term Nigeria national scale ratings on the sovereign.
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In a press release on Friday, S&P stated that “the positive outlook reflects improving external, economic, fiscal, and monetary results. Despite low GDP per capita, a weak, albeit improving, fiscal revenue base, high debt servicing costs as a percentage of revenues, and challenges in compiling national statistics, we think authorities are taking steps to improve the economy’s growth prospects, and macroeconomic resilience.”
The rationale for the rating is attributed to several factors:
- Broad-based structural indicators are starting to improve following reform momentum that has been maintained since mid-2023.
- More marked improvements in the government’s financing capacity could develop.
- Increased confidence in the market-driven stability of the naira is a positive factor in our analysis.
- Key weaknesses and vulnerabilities will only gradually reduce.
S&P Global projects that Nigeria’s real GDP growth to average 3.7% (from 3.2% previously) over 2025-2028, through both the non-oil and oil sector.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
