Standard & Poor’s (S&P) Global Ratings on Friday revised its outlook on Nigeria to “positive” from “stable” backing the country’s ongoing economic reforms.
The New York-based financial information and analytics company, also affirmed the country’s rating at “B-/B”.
“The monetary, economic, and fiscal reforms being implemented by Nigerian authorities will yield positive benefits over the medium term,” S&P said in a statement.
In May, Moody’s upgraded Nigeria’s rating by one notch to “B3” from “Caa1”, citing notable improvements in the country’s external and fiscal positions, while Fitch last month kept its “B” rating and “stable” outlook.
In 2023, President Bola Tinubu launched Nigeria’s boldest reforms in decades, scrapping the costly petrol subsidy and removing currency trading restrictions to spur growth and attract foreign investment, Reuters reported.
Analysts said if sustained, these reforms could support long-term economic expansion, though implementation hurdles and global oil price volatility still pose risks.
To bridge fiscal gaps, Nigeria has turned to debt markets. Last week, the country raised $2.35 billion through a Eurobond issuance to help finance its 2025 budget deficit, while continuing to borrow domestically.
Meanwhile, analysts have raised fresh concerns over the credibility of Nigeria’s budget process, warning that the fiscal system is drifting into dysfunction as delayed capital spending, missing implementation reports, and repeated extension of the Appropriation Acts continue to erode transparency and distort the national budget cycle.
A notable achievement of the administration of late President Muhammadu Buhari, was the restoration and maintenance of a predictable January-to-December federal budget cycle, which the present administration has not been able to maintain. There have also been reported delays in capital spending.
BudgIT’s co-founder, Mr. Seun Onigbinde, in an interview on a national television, stated that the federal government has lost cohesion in the budget preparation and implementation chain, creating overlapping fiscal cycles that no longer align with national planning or economic priorities.
Onigbinde, highlighted opacity around project execution.
“We do not even understand the number of projects being implemented currently by the government. We had the 2023 budget and the 2023 supplementary budget extended to 2024. Then after a while, we saw that the 2024 budget was also extended a little bit more.
“Now we also heard that the 2025 budget capital component, the implementation just kicked off in October. The President signed the budget earlier in the year and we’re now starting capital budget implementation in October. It shows that there is a cross-disconnect.”
He added that despite the continuous extension of the 2023 and 2024 fiscal cycles into 2025, major reporting obligations remain unfulfilled. “We don’t even have any budget implementation report of the 2025 budget, and we are in the third quarter.”
According to him, the absence of these mandatory reports weakens the accountability chain for capital projects and leaves the public unable to track government priorities.
“You do not even understand which project is being implemented and how significant that project is to national development creates a huge level of distortion,” he added.
With remnants of previous fiscal cycles still running concurrently, he questioned the logic of commencing another appropriation year.
“There seems to be a disconnect between the Budget Office, the Ministry of Budget and National Planning, and the Ministry of Finance,” he said.
Chief Executive Officer of CFG Advisory, Mr. Tilewa Adebajo, weighed in on the fiscal challenges.
He said: “The 2025 budget still needs to be fully closed out, and the challenge has been that revenue inflows have not been commensurate with planned expenditures.”
“The government is only now attempting to align its spending with actual revenue and finance the deficit to close out the 2025 budget. “It is crucial that this process is completed promptly and efficiently, so that future budgets can be more realistic and implementable, rather than continuing a cycle where expenditure consistently exceeds available resources.”
Also speaking, Head of Financial Institutions Ratings at Agusto & Co., Mr. Ayokunle Olubunmi, stressed the urgent need to restore order to the fiscal calendar.
He said: “We must revert to the January to December budget cycle, such that before the 31st of December every year, the budget has been passed,” he said. “The practice of having more than one budget running concurrently seems to distort things and create a lot of confusion.”
Nume Ekeghe
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