Credit ratings agency S&P upgraded Nigeria’s long-term sovereign rating to “B” from “B-” on Friday, ​citing improving credit worthiness.

Higher oil production and prices, a ‌large increase in domestic refining capacity, and the 2023 decision to liberalise the exchange rate are boosting Nigeria’s economic growth and balance of payments ​outcomes, the agency said, as it also revised the ​country’s outlook to “stable” from “positive”.

The World Bank said in April ⁠it expects Nigeria’s economy to expand by about 4.2% in 2026 ​despite the Iran war, and urged authorities to save windfalls from ​stronger oil prices, maintain tight monetary policy and avoid broad subsidies to help curb inflation.

Africa’s most populous nation had made progress taming price pressures ​before the U.S.-Israeli war with Iran, with inflation easing for 11 ​straight months, before edging up in March. But the conflict drove up fuel ‌costs ⁠and rippled through to food prices.

Nigeria’s headline consumer inflation rose for the second month running in April.

S&P said, as a sizable net oil exporter of crude oil and an emerging producer ​of refined fuels, ​Nigeria is less ⁠exposed to the spillover effects from the Middle East conflict than most regional peers.

“We expect Nigeria’s ​real GDP per capita to rise 1.4% on ​average ⁠per year until 2029, a significant improvement on the 1% yearly contraction, on average, over the past decade,” it said.

S&P’s rating action ⁠follows Fitch ​and Moody’s, which also upgraded the Nigerian sovereign ​over the past year citing improvements in its external and fiscal positions.

REUTERS