Fitch revises Nigeria’s credit outlook to positive, affirms ‘B’ rating

On Friday, October 9, 2026, Fitch Ratings adjusted Nigeria's credit outlook to Positive from Stable, while maintaining its long-term issuer default rating at 'B'. This rating decision, reported by the Fitch Ratings Nigeria Rating Action, cited stronger foreign exchange reserves, ongoing economic reforms, and moderating inflation as factors contributing to the positive outlook.

However, the agency cautioned that Nigeria's fiscal pressures and high debt-servicing costs still pose concerns. Fitch noted that Nigeria's gross foreign exchange reserves had risen to $54.9 billion by September 25, 2026, up from $32 billion in mid-April 2024, driven by portfolio inflows, export receipts, remittances, and formalized foreign exchange transactions.

The agency projected Nigeria's current account surplus to reach 6.4% of GDP in 2026 and reserve coverage to reach 6.3 months of current external payments by year-end. Net foreign exchange reserves were reported at $34.8 billion at the end of 2025, a significant increase from about $4 billion at the end of 2023. Fitch also highlighted a rise in oil production and domestic refining, which has reduced refined fuel imports and foreign exchange demand.

Despite these improvements, Fitch projected Nigeria's GDP growth at 4.3% in 2026, with continued growth above 4% expected in 2027 and 2028. The agency warned that high food and fuel prices, additional petrol price hikes, and security risks could potentially weaken household incomes and economic growth. Despite the positive outlook, Fitch anticipated the fiscal deficit to widen to 3.6% of GDP in 2026, up from 3.1% in 2025, largely due to increased government spending.

Fitch also cautioned about Nigeria's use of Total Return Swaps and repurchase agreements, which could introduce transparency, liquidity, and creditor-recovery risks.