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Nigeria’s credit outlook was upgraded to stable from negative by S&P Global Ratings on President Bola Tinubu’s planned reforms.
The debt assessor still scores the nation at B-, six notches into junk and on par with Bolivia and Barbados, according to a Friday statement.
The improved outlook comes after Nigeria’s new leader scrapped costly fuel subsidies, removed the central bank governor and overhauled the nation’s exchange-rate policies.
“The new government is moving ahead with a series of reforms that could, if delivered, benefit growth and fiscal outcomes,” analysts Ravi Bhatia, Samira Mensah and Juili Pargaonkar wrote.
“We believe these measures will gradually benefit Nigeria’s public finances and its balance of payments.”
Still, both the nation’s planned fiscal spending and inflation remain high, S&P said.
The West African region may also face geopolitical risks tied to the recent coup in neighboring Niger, according to the analysts.