Fitch upgrades Nigeria’s outlook to positive, affirms ‘B’ rating
The Federal Government of Nigeria has welcomed Fitch Ratings’ decision to revise the country’s economic outlook from stable to positive, signaling progress in reforms, bolstered external reserves, and moderating inflation.
On Friday, Fitch affirmed Nigeria’s Long-Term Issuer Default Ratings at ‘B’ while adjusting the outlook. Mr. Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, made the announcement in Abuja on Saturday.
“The positive outlook indicates the potential for a rating upgrade if current economic trends and momentum in reforms are maintained,” Oyedele said.
According to Fitch, the improved outlook is attributed to greater flexibility in the naira, a decline in inflation, and a faster accumulation of foreign exchange reserves. Oyedele noted that Nigeria’s gross foreign reserves rose to $54.9 billion as of September 25, an increase from $32 billion in mid-April 2024. This growth is attributed to stronger portfolio inflows, increased export earnings, and remittances, as well as a more formalized approach to foreign exchange transactions.
Oyedele explained that the enhanced quality of reserves has strengthened Nigeria’s ability to absorb external shocks, projecting a current account surplus of 6.4% of GDP by 2026. He also mentioned that Fitch forecasts real GDP growth at 4.3% for 2026, a rise from 4% in 2025, with projected growth remaining above 4% in 2027 and 2028, primarily driven by non-oil sectors.
The minister highlighted that Nigeria has consistently met its OPEC target of 1.5 million barrels of crude oil production per day since May, which has helped reduce imports of refined petroleum products and the demand for foreign exchange.
Average inflation is expected to moderate to 15.4% by 2026, substantially lower than its 2024 level. Oyedele added that tax reforms are anticipated to boost non-oil revenue relative to GDP, while government debt is projected to average 32% of GDP from 2026 to 2028, notably below the 56% median for countries rated ‘B’.
He pointed out that Fitch recognized the strength of Nigeria’s domestic debt market and the recent bank recapitalization efforts, noting that many banks have capital adequacy ratios exceeding 20%.
Oyedele reported that the three major international rating agencies have taken positive rating actions regarding Nigeria in 2026. He recalled that S&P Global Ratings upgraded Nigeria’s rating to ‘B’ from ‘B-’ in May, while Moody’s revised its outlook to positive in August. Additionally, FTSE Russell reinstated Nigeria’s Frontier Market status effective September 21, 2026.
These developments reflect increasing confidence in Nigeria’s economic reform path, according to the minister. Oyedele stated that the positive outlook validates reforms enacted under President Bola Tinubu, including the removal of the fuel subsidy, exchange rate unification, and the implementation of tax reforms.
He emphasized the government’s medium-term goal of securing investment-grade status for Nigeria, aiming to reduce borrowing costs, attract private investment, and create jobs.
However, Oyedele acknowledged Fitch’s concerns regarding ongoing inflation, low government revenue in relation to economic output, and high interest payments, which the administration considers central to its reform agenda.
The minister reaffirmed the government’s commitment to ongoing reforms and a transparent, market-driven foreign exchange regime. Planned priorities include implementing new tax laws, enhancing spending efficiency, improving debt management, and promoting non-oil economic growth.
He also pledged to translate macroeconomic stability into shared prosperity through food security, job creation, human development, and support for small businesses.
