Nigeria's Credit Rating Gets a Boost

The Federal Government says that Fitch Ratings’ decision to change Nigeria’s credit rating outlook from Stable to Positive shows progress in economic reforms, changes in the foreign exchange market, and efforts to improve the country’s external position.

Fitch made this announcement on 9 October, keeping Nigeria’s long-term foreign-currency issuer default rating at ‘B’.

In a statement released on Saturday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said that Fitch pointed to increased foreign exchange reserves, lower inflation, and better economic prospects as reasons for the positive outlook.

According to the minister, Nigeria’s gross foreign exchange reserves rose to $54.9 billion as of 25 September 2026. This is up from $32 billion in mid-April 2024.

He said the increase is due to more formal foreign exchange transactions, portfolio inflows, higher exports, and remittances.

Fitch also expects that Nigeria will have a current account surplus of 6.4 percent of gross domestic product in 2026.

The ratings agency predicts that Nigeria’s real gross domestic product will grow by 4.3 percent in 2026, compared to 4 percent in 2025. It expects growth to stay above 4 percent in 2027 and 2028.

Fitch believes that non-oil activities will continue to lead the economic growth.

This projection comes as Nigeria’s economy grew by 4.43 percent year-on-year in the second quarter of 2026, according to the National Bureau of Statistics (NBS).

This growth is higher than the 3.89 percent recorded in the first quarter of 2026 and the 4.23 percent recorded in the same quarter of 2025.

The World Bank’s October 2026 Nigeria Development Update projects an average annual economic growth of 4.4 percent between 2026 and 2028. It identifies services and agriculture as key contributors to this economic activity.

On inflation, Fitch forecasts an average rate of 15.4 percent in 2026, which is less than half of what was recorded in 2024.

The NBS reported that Nigeria’s headline inflation rate slightly dropped to 15.39 percent in August 2026, down from 15.43 percent in July.

These figures give recent context for Fitch’s inflation assessment, although the agency’s annual average forecast differs from the monthly inflation rate reported by the NBS.

Fitch also pointed out developments in Nigeria’s oil sector, including crude oil production reaching the country’s OPEC target of 1.5 million barrels per day starting May 2026.

Mr Oyedele noted that increased local refining is helping to cut down on fuel imports and reduce foreign exchange demand.

On public finances, Fitch expects Nigeria’s tax reforms to boost non-oil revenue compared to the size of the economy.

The agency predicts that general government debt will average 32 percent of GDP between 2026 and 2028, which is lower than the median of 56 percent for countries with a ‘B’ rating.

Fitch also highlighted Nigeria’s domestic debt market and the banking sector recapitalisation, noting that many banks have capital adequacy ratios above 20 percent.

But the agency pointed out ongoing challenges. Inflation remains high compared to peer countries, government revenue is low compared to the size of the economy, and interest payments take up a big chunk of government revenue.

The minister said the federal government will keep implementing reforms to increase revenue, improve spending efficiency, strengthen debt management, and support non-oil economic growth.

Fitch’s decision follows other changes in Nigeria’s international credit ratings.

In May 2026, S&P Global Ratings raised Nigeria’s credit rating from ‘B-’ to ‘B’. In August, Moody’s changed its outlook on Nigeria to Positive while keeping its ‘B3’ rating.

Mr Oyedele mentioned that the government’s medium-term goal is to enhance Nigeria’s credit standing and aim for investment-grade status.

He said the administration will keep focusing on reforms in the foreign exchange market, tax revenue mobilisation, fiscal governance, more efficient public spending, and growth in non-oil sectors.

The minister added that the broader aim is to translate economic reforms into jobs, food security, support for small businesses, and better living standards.