Fitch Raises Nigeria’s Outlook to Positive, Retains ‘B’ Rating

By Adebola Muili

Fitch Ratings has revised Nigeria’s credit outlook from stable to positive while retaining the country’s long-term issuer default rating at ‘B’, citing economic reforms, stronger foreign exchange reserves and easing inflation.

The Federal Government said the decision reflected growing confidence in the sustainability of Nigeria’s economic reforms and improvements in its external financial position.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this in a statement issued on Saturday, October 10, 2026, following Fitch’s assessment announced on October 9.

According to the government, the rating agency identified increased flexibility in the naira, disinflation and faster-than-expected accumulation of foreign exchange reserves as key factors behind the improved outlook.

Nigeria’s gross foreign exchange reserves rose to $54.9 billion as of September 25, 2026, from $32 billion in mid-April 2024. The increase was supported by greater formalisation of foreign exchange transactions, portfolio inflows, export earnings and remittances.

Fitch also projected a current account surplus of 6.4 per cent of gross domestic product in 2026, indicating an improvement in the country’s external position and capacity to withstand economic shocks.

On economic growth, the agency forecast Nigeria’s real GDP to expand by 4.3 per cent in 2026, compared with four per cent in 2025, with growth expected to remain above four per cent in 2027 and 2028, driven mainly by non-oil activities.

The agency noted that crude oil production had met Nigeria’s OPEC target of 1.5 million barrels per day since May 2026, while increased domestic refining was helping to reduce imports of refined petroleum products and demand for foreign exchange.

Average inflation is projected to moderate to 15.4 per cent in 2026, less than half its 2024 level.

On public finances, Fitch expects tax reforms to improve non-oil revenue generation and projects general government debt to average 32 per cent of GDP between 2026 and 2028, below the 56 per cent median for countries with a ‘B’ rating.

It also acknowledged the depth of Nigeria’s domestic debt market and the ongoing bank recapitalisation exercise, noting that many banks had capital adequacy ratios above 20 per cent.

Reacting to the assessment, Oyedele said the positive outlook validated the administration’s reform programme, including the removal of fuel subsidy, unification of the foreign exchange rate and tax reforms.

“Our medium-term ambition is to place Nigeria firmly on the path to investment grade,” he said.

He added that the government was pursuing the reforms not merely to improve the country’s credit rating but to lower its cost of capital, attract private investment and create jobs.

However, the government acknowledged the challenges identified by Fitch, including inflation remaining above levels in peer countries, low government revenue relative to the size of the economy and the high proportion of revenue consumed by interest payments.

Oyedele said the government’s reform programme was designed to address these constraints through stronger revenue mobilisation, improved fiscal governance and structural reforms to support economic diversification.

He reaffirmed the government’s commitment to maintaining a transparent, market-reflective foreign exchange regime, implementing the new tax laws, improving public spending efficiency and strengthening debt management.

Other priorities include promoting non-oil growth, improving food security, supporting small businesses and translating macroeconomic stability into better living conditions for Nigerians.

The minister noted that Fitch’s decision followed other positive assessments of Nigeria in 2026. S&P Global Ratings upgraded the country’s rating to ‘B’ from ‘B-’ in May, while Moody’s Ratings revised its outlook on Nigeria to positive in August.

Nigeria also returned to Frontier Market status under FTSE Russell’s classification, effective September 21, 2026.

According to the government, further positive rating action would depend on sustained disinflation, continued implementation of reforms, stronger external reserves and improved mobilisation of non-oil revenue.