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Fitch Raises Nigeria’s Outlook to Positive as Reserves Hit $54.9bn
Fitch Ratings has revised Nigeria’s credit outlook from stable to positive, citing improved foreign exchange reserves, greater exchange-rate flexibility and sustained economic reforms.
The international rating agency, however, retained Nigeria’s long-term issuer default ratings at ‘B’, indicating that significant economic and governance challenges remain.
In its latest assessment released on Friday, Fitch said the outlook revision reflected growing confidence in the continuity of Nigeria’s economic policy reforms, including through the 2027 general elections.
The agency said monetary and foreign exchange reforms had supported greater naira flexibility, easing inflationary pressures and faster-than-expected accumulation of external reserves.
Nigeria’s gross foreign exchange reserves rose to $54.9 billion as of September 25, 2026, from $32 billion in mid-April 2024.
Fitch attributed the increase to the formalisation of foreign exchange transactions, strong portfolio inflows, higher export receipts and remittances.
It said the improvement in reserve quality had strengthened Nigeria’s capacity to withstand external shocks, while ongoing reforms were improving monetary policy transmission and creating room for further disinflation.
“Nigeria’s ratings reflect its large economy, a relatively developed and liquid domestic debt market, large oil and gas reserves and an improved macroeconomic policy framework,” the agency said.
Fitch forecast that Nigeria’s average annual inflation would moderate to 15.4 per cent in 2026, less than half its 2024 level, supported by naira stability and tight monetary policy.
However, the projected rate remains significantly above the 5.6 per cent median for countries with a ‘B’ rating.
The agency also reported an improvement in crude oil production, which rose by 10 per cent quarter-on-quarter in the second quarter of 2026, excluding condensates.
According to Fitch, production has met Nigeria’s OPEC target of 1.5 million barrels per day since May, averaging 1.52 million barrels per day.
It expects output to remain around that level in the near term, supported by improved security and domestic investment, although production remains below pre-pandemic levels.
The agency added that increased output from the Dangote refinery and the rehabilitation of other facilities had reduced refined petroleum imports and foreign exchange demand.
Despite these gains, Fitch identified weak governance indicators, dependence on hydrocarbons, persistent inflation, security challenges and low government revenue as constraints on Nigeria’s credit rating.
It projected that the general government fiscal deficit would widen to 3.6 per cent of gross domestic product in 2026, from the previous year’s level, amid higher spending on security, personnel, social programmes, capital projects and state government expenditure.
Fitch expects tax reforms to increase non-oil revenue to 7.5 per cent of GDP, accounting for about 66 per cent of government revenue, although implementation constraints could limit the gains.
The agency also warned that significant policy reversals, looser fiscal management, weaker capital inflows or major social instability could undermine the positive outlook.
Reacting to the revision, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the decision validated the economic reforms introduced by President Bola Tinubu’s administration.
In a statement on Saturday, Oyedele said the government remained committed to putting Nigeria on the path to investment-grade credit status.
“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,” he said.
The minister acknowledged that inflation remained elevated relative to peer countries, government revenue was low compared with the size of the economy, and interest payments consumed a significant share of public revenue.
He said the government would sustain economic reforms, maintain a disciplined and transparent foreign exchange regime, and improve revenue collection through the implementation of new tax laws and better tax administration.
Oyedele added that the administration’s priority was to translate macroeconomic stability into broader prosperity through food security, job creation, human development and support for small businesses.
