By 
Analysts at S&P Global Ratings have expressed cautious optimism about Nigeria’s economic outlook, noting that the reform agenda introduced by President Bola Tinubu is expected to support continued economic growth despite ongoing volatility in the naira.
The assessment was shared during a webinar hosted by the ratings agency, themed “Africa’s 2026 Credit Cycle Dynamics,” where analysts discussed the evolving credit environment across the continent and the factors likely to shape Africa’s financial landscape in the coming year.
During the 60-minute session, a panel of S&P analysts examined how African economies are adjusting to shifting global financial conditions. While several countries are emerging from debt restructuring with stronger credit profiles, analysts noted that policy reforms in Nigeria—Africa’s largest economy—remain central to regional economic stability.
According to S&P, Nigeria’s reform momentum has been encouraging, with analysts projecting sustained economic expansion under the current administration. However, they cautioned that the local currency continues to experience fluctuations, making it an area of close monitoring for investors and financial institutions.
The agency also noted that external financial support dynamics could evolve, particularly from members of the Gulf Cooperation Council, potentially influencing the country’s financial outlook.
S&P further highlighted progress under Nigeria’s economic adjustment programme supported by the International Monetary Fund, which has helped stabilise key macroeconomic indicators. The agency forecasts that Nigeria’s real GDP will grow at an average rate of about 3.7 percent between 2025 and 2026.
Analysts attributed this outlook partly to reforms in the foreign exchange market, including the introduction of a “willing-buyer, willing-seller” model, which has helped narrow the gap between official and parallel market exchange rates.
Despite these improvements, the agency warned that Nigeria’s banking sector remains vulnerable to currency shocks. With nearly half of bank loans denominated in foreign currency, significant depreciation of the naira could affect asset quality and financial stability.
Beyond Nigeria, the webinar also examined credit developments in other African regions, highlighting differing economic trajectories across the continent.
In Southern Africa, analysts described Zambia as an improving case following its debt restructuring, supported by strong commodity exports such as gold and copper. Similarly, Ghana has begun to stabilise its financial position after undergoing fiscal reforms and restructuring efforts.
In contrast, Ethiopia continues to face challenges in its restructuring negotiations after a proposed bond agreement was rejected by its creditor committee, forcing authorities to reopen discussions despite signs of improving macroeconomic conditions.
Elsewhere, Morocco was highlighted as a standout performer in Francophone Africa. Analysts credited proactive fiscal and economic policies for the country’s return to investment-grade status (BBB-) in late 2025.
Kenya was also noted to be showing gradual external improvement, benefiting from lower oil prices and stronger export performance, though its economy remains sensitive to fluctuations in global energy markets.
In the case of Mozambique, S&P analysts pointed to significant medium-term growth potential as large-scale liquefied natural gas (LNG) projects gather momentum, even as the country navigates short-term currency pressures.
The discussion concluded with a broader warning about the continent’s looming “debt wall.” According to S&P, African governments are expected to face external debt repayments exceeding $90 billion in 2026, highlighting the importance of fiscal discipline and prudent economic management.
While global financial conditions may remain relatively supportive—particularly as the Federal Reserve System continues easing monetary policy—analysts stressed that African economies must maintain strong reform momentum and financial agility to avoid future liquidity challenges.
The webinar featured insights from several S&P Global Ratings experts across sovereign, banking, and corporate sectors, reflecting the growing importance of coordinated policy responses and institutional resilience in strengthening Africa’s financial architecture.
Comments