The Central Bank of Nigeria's foreign exchange and monetary reforms continue to strengthen the country's macroeconomic credibility, following the latest sovereign ratings upgrade by S&P Global Ratings on May 16, 2026. S&P upgraded Nigeria's long-term sovereign credit rating from 'B-' to 'B', citing an improving macroeconomic profile driven by stronger economic growth, improved balance-of-payments performance, higher oil production and prices, increased domestic refining capacity, and the exchange-rate liberalization introduced in 2023.
Global Recognition of Reforms
This upgrade is part of a sustained sequence of positive rating actions by major global agencies. Fitch upgraded Nigeria to 'B' in April 2025, and Moody's upgraded to 'B3' in May 2025. S&P had revised Nigeria's outlook to positive in November 2025 before the latest upgrade. These actions indicate that Nigeria's reform story is gaining repeated external validation, moving beyond domestic policy intent.
CBN's Role in External Sector Improvement
The Central Bank of Nigeria's reforms are critical to the external-sector indicators supporting credibility. Key measures include foreign exchange reforms, clearance of the FX backlog, reserve rebuilding, and market-stability efforts. In January 2025, CBN Governor Olayemi Cardoso announced the clearance of the outstanding $7 billion foreign exchange backlog after forensic audit verification, addressing a major investor concern.
Strengthened Reserve Position
Nigeria's net foreign-exchange reserves rose to $34.8 billion at the end of 2025, up from $3.99 billion two years earlier. Gross reserves increased from $40.19 billion to $45.71 billion over the previous year and reached $50.45 billion by mid-February 2026. The CBN attributed this to stronger external fundamentals, improved transparency, better reserve management, and increased FX inflows.
Balance-of-Payments Turnaround
In 2024, Nigeria recorded a $6.83 billion balance-of-payments surplus, reversing deficits of $3.34 billion in 2023 and $3.32 billion in 2022. The current and capital accounts posted a $17.22 billion surplus, supported by a $13.17 billion goods trade surplus. Portfolio investment inflows more than doubled to $13.35 billion, and foreign exchange reserves rose by $6 billion to $40.19 billion by end-2024.
Impact on Sovereign Ratings
Sovereign ratings are heavily influenced by a country's ability to meet external obligations, attract capital, and manage shocks. The CBN's reforms provide the monetary and external-sector foundation for credibility. S&P cited exchange-rate liberalization as a factor supporting stronger growth and improved balance-of-payments performance. Moody's also noted improvements in foreign exchange management in its May 2025 upgrade.
Broader Structural Shifts
Nigeria's improved credit profile reflects expanding domestic refining capacity, which supports growth and balance-of-payments performance. The country remains a sizable net crude oil exporter and an emerging producer of refined fuels, reducing exposure to regional spillover risks.
Coordinated Reform Effort
The S&P upgrade underscores the importance of coordinated reforms across monetary policy, fiscal measures, exchange-rate adjustment, and real-sector developments. The CBN remains a critical credibility anchor within this ecosystem, with FX reforms, reserve rebuilding, and market-confidence restoration central to rebuilding macroeconomic credibility.
Implications for Investors and Citizens
For investors, repeated ratings recognition reassesses Nigeria's risk profile, influencing capital flows and confidence in meeting obligations. While it does not automatically reduce inflation or lower prices, it strengthens the confidence base for investment and growth. The challenge is to convert external validation into deeper domestic confidence, translating into lower inflation, improved investment, job creation, and economic resilience.
