S&P affirmed Nigeria’s long- and short-term foreign and local currency sovereign credit ratings at ‘B-/B’ with a stable outlook. According to S&P, the stable outlook balances fiscal risks from reduced oil production and delays to subsidy reform over the next 12 months against Nigeria’s comparatively deep domestic financial markets and its stock of FX reserves, especially given the limited external commercial debt repayments through 2025. Improved oil prices alongside oil sector reforms and upcoming refinery projects should support Nigeria’s longer-term economic growth. Nigeria’s ratings could be upgraded if the country experiences significantly stronger economic performance than currently expected while external financing pressures moderate and fiscal imbalances reduce. Conversely, the ratings could be lowered if the fiscal performance is weaker than expected, if the government’s deficit financing strategy comes under strain and if unrest were to rise significantly in the run-up to the elections.
