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 of 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 have once more been acknowledged by S&P Global Ratings. The reforms instituted by Olayemi Cardoso-led CBN to achieve price and exchange rate stability, catalyse sustainable economic growth, and protect the livelihoods of millions of Nigerians have attracted global recognition.

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 liberalisation 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 characterised 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 subsidy 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.

Other policy measures

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.

According to Cardoso, “The FX Code represents a decisive step forward, setting clear and enforceable standards for ethical conduct, transparency, and good governance in our foreign exchange market. The era of opaque practices is over. The FX Code marks a new era of compliance and accountability. Under the CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions.”

Governor Cardoso also noted that the journey towards market reform is already yielding results. He stated, “The year 2024 was marked by structural reforms that sought to return the naira to a freely determined market price and ease volatility as several distortions were removed from the market.”

Beyond the foreign exchange market, the FX Code forms part of the CBN’s renewed focus on compliance across the financial sector. Its six guiding principles, alongside 52 sub-principles, were designed to become the benchmark for conduct across all participating institutions.

Issued as a guideline for the foreign exchange market, the FX Code is backed by the authority of the CBN Act of 2007 and the Banks and Other Financial Institutions Act (BOFIA) of 2020.

These legislative instruments empower the CBN to establish and enforce directives regarding the standards financial institutions must follow in conducting foreign exchange business in Nigeria.

The FX Code, therefore, serves as an official directive that all market participants are expected to observe in their operations.

Besides FX Code, the apex bank also introduced the Electronic Foreign Exchange Matching System (EFEMS), which has proven effective in other economies in enhancing the functionality of the foreign exchange market.

The EFEMS was meant to check forex market distortions, eliminate speculative activities and instil transparency. The EFEMS, which is commonplace in developed and developing markets offers real-time information on currency rates, trading volumes, and market activity.

Views from stakeholders

The Federal Government has described the latest upgrade of Nigeria’s sovereign credit rating by S&P Global Ratings as further evidence that the country’s economic reforms are beginning to restore international confidence in the economy.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the government welcomed S&P’s decision to raise Nigeria’s sovereign credit rating from “B-” to “B” with a stable outlook.

The minister said the upgrades collectively reflect growing confidence among international financial institutions and investors in Nigeria’s reform direction and medium-term economic outlook.

“These independent assessments collectively affirm that the difficult but necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu are yielding measurable results and laying the foundation for a more stable, transparent and resilient economy,” Oyedele stated.

He added that the S&P specifically highlighted improvements in Nigeria’s external financial position, stronger balance of payments performance, increased crude oil production and expanding domestic refining capacity.

The agency also recognised ongoing reforms in the foreign exchange market and fiscal policies aimed at improving revenue generation, debt sustainability and transparency in public finance management, according to the statement.

Oyedele noted that Nigeria’s debt-to-revenue ratio has improved significantly since 2023 and is projected to decline further as reforms continue to take effect.

He said the upgrades from Fitch, Moody’s and S&P send a strong signal to global investors and development partners that Nigeria is gradually rebuilding macroeconomic credibility.

“The government remains firmly committed to prudent fiscal management, macroeconomic stability and structural reforms that promote inclusive and sustainable growth,” he noted.

He also reiterated the government’s position against the return of fuel subsidies, arguing that previous subsidy regimes created major fiscal distortions, encouraged smuggling and weakened foreign exchange liquidity.

According to him, the administration remains committed to maintaining a market-driven economy built on transparency, competition and regulatory oversight.

He added that the government would continue implementing policies aimed at supporting private investment and creating a stable environment for businesses.

“We are focused on addressing inflationary pressures, improving food security, expanding decent job opportunities, and ensuring that economic growth translates into meaningful and inclusive prosperity for all Nigerians,” he said.

He added that federal, state and local governments would continue implementing reforms “with discipline, pragmatism and compassion” while engaging citizens and stakeholders.

Recognition for Cardoso

The impacts of the bold reforms in Nigeria’s financial landscape have continued to reverberate across the world.

The African Banker Awards Committee’s decision to give the African Central Bank Governor of the Year Award to Cardoso did not come as a surprise to many industry watchers.

The award, presented by African Banker magazine, recognises Cardoso’s “bold and strategic” leadership in steering monetary and regulatory reforms that have restored stability and confidence in Nigeria’s financial system, according to event organisers.

The Awards Committee lauded the CBN under Cardoso for implementing key policy measures aimed at keeping the naira stable, enhancing forex market efficiency and transparency.

The Committee noted that these efforts have laid the groundwork for long-term macroeconomic resilience and renewed investor confidence.

Now in its 19th year, the African Banker Awards are organised by African Banker magazine with the African Development Bank Group as its official patron. The annual event draws senior figures from government, banking, and development finance institutions across the continent to celebrate excellence in African finance.

Since his appointment in 2023, Cardoso has implemented several reforms to stabilise the forex market and attract foreign investment.

The African Banker Award has, since its inception in 2007, sought to recognise and celebrate the exceptional individuals and organisations driving Africa’s rapidly transforming financial services sector.

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