Citing improved foreign exchange liquidity, stronger fiscal revenues, and rising external reserves, global ratings agency S&P Global Ratings recently upgraded Nigeria’s long-term foreign and local currency credit ratings to ‘B’ from ‘B-’. It acknowledged that improvement in Nigeria’s credit profile reflected gains from three years of structural reforms, particularly the FX liberalisation programmes driven by Central Bank of Nigeria (CBN)Governor, Olayemi Cardoso. S&P Global Ratings highlighted improved FX market liquidity and $10 billion turnover recorded in April 2026 as one for the major gains of the CBN-led FX reforms.
Nigeria’s financial sector reforms and the role of the Central Bank of Nigeria (CBN) in stabilising the economy has once more been acknowledged by S&P Global Ratings.
The reforms instituted by Olayemi Cardoso-led CBN to achieve price and exchange rate stability, catalyze sustainable economic growth, and protect the livelihoods of millions of Nigerians have attracted global recognitions.
S&P Global Ratings recently affirmed Nigeria’s short-term sovereign ratings at ‘B’, while raising the country’s national scale ratings to ‘ngA+/ngA-1’ from ‘ngBBB+/ngA-2’, with a stable outlook. “Following three years of sustained structural reforms, Nigeria’s creditworthiness has improved.”
The agency said the liberalization of the exchange rate has bolstered access to foreign currency and enabled a market-driven exchange-rate environment, supporting investor and consumer confidence, while benefiting non-oil GDP growth.
It highlighted improved FX market liquidity, stating that average monthly FX turnover rose to $8.6 billion in 2025, while April 2026 alone recorded about $10 billion in market supply.
The agency noted that Nigeria’s external reserves rose to $50 billion by March 2026 from about $33 billion in 2023, supported by stronger current account balances, lower import demand, fuel subsidy removal, and expanding domestic refining capacity.
S&P credited the Federal Government’s fiscal reforms, particularly Executive Order 9 signed in February 2026, which mandates the Nigerian National Petroleum Company Limited to remit a larger share of petroleum revenues directly into the Federation Account.
The agency projected that government revenue could rise to 12.4 per cent of GDP in 2026 from 7.3 per cent in 2023, while debt servicing pressures are also expected to moderate over the medium term.
It further projected oil production to average 1.66 million barrels per day in 2026, Nigeria’s current account surplus to improve to 5.8 per cent of GDP, inflation to decline from 23 per cent in 2025 to 17.7 per cent in 2026, and real GDP growth to settle at 3.7 per cent in 2026 after four per cent growth in 2025. The development comes amid broader reforms aimed at stabilising Nigeria’s economy after years of exchange-rate distortions, rising fiscal deficits, and foreign exchange shortages.
X-Raying Financial Sector Reforms
Upon assuming office in October 2023, the apex bank under his leadership prioritized reforms to rebuild Nigeria’s economic buffers and strengthen resilience.
Inflation, which had surged to 27 per cent, was one of the most pressing challenges, partly driven by excessive money supply growth. While the GDP growth had stagnated at a meagre 1.8 per cent over the previous eight years, money supply expanded rapidly, averaging about 13 per cent growth annually.
This imbalance not only fueled inflation but also contributed to a significant depreciation of the naira.
Besides, inflation creates uncertainty for households and businesses, acting as a silent tax by eroding purchasing power and driving up living costs.
To tackle the pressing challenge of inflation, the CBN acted decisively by raising the Monetary Policy Rate by 875 basis points to 27.5 per cent in 2024—an essential move to contain inflation and restore stability.
FX Backlogs Cleared
In the foreign exchange market, the country faced a backlog of over $7 billion in unfulfilled commitments and a fragmented FX regime characterized by multiple forex rates, which had encouraged arbitrage opportunities.
This regime stifled much needed foreign investment, and led to the depletion of our external reserves which fell to $33.22bn in December 2023. It must also be understood that the cost of the FX subsidy regime is estimated to far exceed that of fuel subsidies.
The apex bank has also undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency. This unification has enabled it to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future.
To further enhance the functionality of the foreign exchange market, the CBN introduced an electronic FX matching system, which has proven effective in other markets.
Aside S&P, Fitch Ratings also acknowledge reforms benefits.
Fitch Ratings said that from exchange rate unification to reduce arbitrage in the markets, introduction of electronic FX matching platform and a new FX code to enhance transparency and efficiency in the market as well as deployment of monetary policy tightening to keep inflation on check, the CBN has demonstrated commitment to achieving sustainable economy growth and exchange rate stability.
Fitch also applauded government’s commitment to policy reforms implemented since its move to orthodox economic policies in June 2023, including exchange rate liberalisation, monetary policy tightening, and steps to end deficit monetisation as well as fuel subsidies removal.
“These have improved policy coherence and credibility and reduced economic distortions and near-term risks to macroeconomic stability, enhancing resilience in the context of persistent domestic challenges and heightened external risks,” the agency stated.
The apex bank recently took strategic step to enhance transparency and boost market confidence with the inauguration of the Nigeria Foreign Exchange Code (FX Code) in Abuja. The FX Code has so far ignited naira stability at both official and parallel markets.
Cardoso, recently launched the FX Code, emphasising integrity, fairness, transparency, and efficiency as critical pillars for driving Nigeria’s economic growth and stability.
He emphasized that the FX Code was built on six core principles: ethics, governance, execution, information sharing, risk management and compliance, as well as confirmation and settlement processes.
These principles, he explained, aligned with international standards while addressing the unique challenges within Nigeria’s foreign exchange market.
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