S&P Global Ratings on Friday revised its outlook on Nigeria to stable from negative, citing the government's recent reforms which the credit ratings agency believes could benefit the country's growth and fiscal outcomes if delivered.

The agency also affirmed its rating for Africa's largest economy at 'B-/B'.

Nigeria's new president, Bola Tinubu, has embarked on some fiscal reforms, which he hopes will kick-start growth and attract foreign investors into a country that has suffered chronic dollar shortages, making it difficult for companies to thrive.

"Nigeria's newly elected government has moved quickly to implement a series of fiscal and monetary reforms, which we believe will gradually benefit public finances and the balance of payments," the ratings agency said in a statement on Friday.

On Monday, Tinubu said Nigeria has saved over 1 trillion naira ($1.32 billion) in just over two months by scrapping a popular but costly subsidy on petrol and unifying the country's multiple exchange rates.

Tinubu's reforms have been welcomed by investors, but unions say the reforms have led to soaring costs when inflation has been in double-digits in Nigeria since 2016, eroding savings and incomes.

The World Bank has said it expects Nigeria could save up to 3.9 trillion naira this year alone from reforms but warned of growing short-term inflationary pressures.

S&P's sovereign analyst Frank Gill said last month that the ratings agency was closely watching Nigeria ahead of its review on Aug. 4 and added that recent reforms were positive signs.

In February, S&P had maintained Nigeria's credit rating at "B-/B" but changed its outlook to "negative". Rival Fitch affirmed the West-African country at 'B-' in May.

Reuters