Nigeria’s improved foreign exchange reserves, falling inflation and sustained economic reforms have prompted Fitch Ratings to revise the country’s credit outlook to positive from stable, while retaining its ‘B’ rating.
The Federal Government said the decision strengthens Nigeria’s prospects of attracting investment and reducing borrowing costs but acknowledged that low government revenue, high interest costs and persistent inflation remain challenges.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this in a statement issued on Saturday, October 10, following Fitch’s October 9 decision.
Fitch said the revised outlook reflected improvements in Nigeria’s policy framework and greater confidence that the government would sustain its reform programme.
According to Oyedele, the rating agency cited the increased flexibility of the naira, disinflation and faster-than-expected growth in foreign exchange reserves.
Nigeria’s gross reserves rose to $54.9 billion on September 25, 2026, from $32 billion in mid-April 2024.
The agency also projected a current account surplus of 6.4 per cent of gross domestic product in 2026, reflecting stronger external buffers and improved resilience to external shocks.
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Fitch expects Nigeria’s economy to grow by 4.3 per cent in 2026, up from 4 per cent in 2025, with growth remaining above 4 per cent in 2027 and 2028, supported mainly by non-oil activities.
It also expects average inflation to moderate to 15.4 per cent in 2026, less than half its 2024 level.
Crude oil production has met Nigeria’s OPEC target of 1.5 million barrels per day since May 2026, while increased domestic refining is reducing refined petroleum imports and foreign exchange demand.
On public finances, Fitch expects tax reforms to increase non-oil revenue and projects general government debt to average 32 per cent of GDP between 2026 and 2028, below the 56 per cent median for countries rated ‘B’.
The agency also recognised Nigeria’s domestic debt market and bank recapitalisation programme, noting that many banks had capital adequacy ratios above 20 per cent.
Oyedele said the government remained committed to sustaining reforms, including foreign exchange market changes, implementation of new tax laws, improved public spending and debt management, and policies to support non-oil growth.
“Fitch’s Positive Outlook further validates the difficult but necessary reforms implemented under the leadership of President Bola Ahmed Tinubu,” he said.
However, he acknowledged that inflation remained higher than in peer countries, government revenue was low relative to the size of the economy, and interest payments consumed a large share of revenue.
“These are the constraints the Government’s reform programme is designed to address,” he said.
The minister added that the government’s medium-term ambition was to put Nigeria on the path to investment-grade status, arguing that stronger creditworthiness could lower the country’s cost of capital, attract private investment and support job creation.
Pinnacle Daily reports that Fitch’s decision follows other positive rating actions in 2026, with S&P Global Ratings upgrading Nigeria to ‘B’ from ‘B-’ in May, while Moody’s Ratings revised its outlook to positive in August.
FTSE Russell also returned Nigeria to Frontier Market status with effect from September 21.
Oyedele said the government would focus on stronger revenue mobilisation, fiscal discipline, transparent debt management and economic diversification to sustain the improvement in Nigeria’s credit profile.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X