Nigeria's credit rating upgrade: The road to 'A' remains long

This upgrade, following similar positive actions by other international rating agencies, signals to global investors that Nigeria is rebuilding macroeconomic credibility after years of policy distortions. While a 'B' rating is still speculative and far from investment grade, it indicates that difficult economic decisions are yielding measurable results. Key reforms include the liberalization of Nigeria’s foreign exchange market, which, despite initial challenges like Naira depreciation and inflation, has improved market functioning and strengthened external reserves.

The removal of fuel subsidies is another bold fiscal reform, redirecting public resources towards infrastructure, education, and healthcare. The Central Bank of Nigeria has also played a crucial role in restoring monetary policy credibility through tighter policies, improved transparency in foreign exchange operations, and enhanced coordination with fiscal authorities. Fiscal reforms, such as improved revenue mobilization and tax administration, along with increased oil production and domestic refining capacity, have contributed to stronger fiscal metrics.

However, challenges remain, including high inflation, low government revenue, high debt servicing costs, infrastructure deficits, unemployment, poverty, and governance weaknesses. To achieve a