Nigeria’s Economy: Fitch Affirms ‘B’ Rating, Revises Outlook To Positive
Fitch Ratings has revised Nigeria’s outlook to Positive from Stable while affirming its Long-Term Issuer Default Ratings at ‘B’, citing reform momentum, stronger external buffers and disinflation.
This was contained in a press release signed by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on October 10, reacting to Fitch’s decision of October 9.
According to the release, the rating agency said the Positive Outlook signals that the rating could be raised if current trends are sustained and reflects its increased confidence that reform momentum will be sustained.
Fitch attributed the improved outlook to greater naira flexibility, disinflation and faster-than-expected accumulation of foreign exchange reserves. Nigeria’s gross reserves rose to $54.9 billion as of September 25, 2026, up from $32 billion in mid-April 2024.
The agency also said the growth was supported by increased formalisation of foreign exchange transactions, strong portfolio inflows, and higher export receipts and remittances. It noted that improved reserve quality has strengthened Nigeria’s resilience to external shocks, projecting a current account surplus of 6.4 per cent of GDP in 2026.
On the real economy, Fitch forecasts real GDP growth of 4.3 per cent in 2026, up from 4 per cent in 2025, with growth expected to remain above 4 per cent in 2027 and 2028, led by non-oil activity.
Crude oil production has met Nigeria’s OPEC target of 1.5 million barrels per day since May 2026, while the ramp-up of domestic refining is reducing refined product imports and demand for foreign exchange. Average inflation is forecast to moderate to 15.4 per cent in 2026, less than half its 2024 level.
On fiscal performance, Fitch expects tax reforms to lift the non-oil revenue to GDP ratio. It projects general government debt to average 32 per cent of GDP between 2026 and 2028, well below the ‘B’ median of 56 per cent. The agency also acknowledged Nigeria’s liquid domestic debt market and the ongoing bank recapitalisation exercise, noting that many banks have capital adequacy ratios above 20 per cent.
The release added that with this action, all three major international rating agencies have taken positive rating actions on Nigeria in 2026. S&P Global Ratings upgraded Nigeria to ‘B’ from ‘B-‘ in May, while Moody’s Ratings revised its outlook to Positive in August. Separately, FTSE Russell returned Nigeria to Frontier Market status effective September 21, 2026.
Oyedele noted that Fitch’s Positive Outlook further validates the difficult but necessary reforms implemented under the leadership of President Bola Ahmed Tinubu, from removing a costly and inequitable fuel subsidy to unifying the exchange rate and the landmark tax reforms.
“Our medium-term ambition is to place Nigeria firmly on the path to investment grade. We are committed to this work, not for the rating itself, but because these reforms will lower Nigeria’s cost of capital, crowd in private investment and create decent jobs at scale,” the statement quoted him as saying.
The Government also acknowledged Fitch’s concerns that inflation, though falling, remains above peer countries, government revenue is still low relative to the size of the economy, and interest costs absorb a high share of revenue.
The statement reaffirmed government’s commitment to sustaining reform momentum and a disciplined, market-reflective foreign exchange regime, raising revenue through full implementation of new tax laws, improving fiscal governance, and advancing structural reforms that support non-oil growth.
