Fitch Ratings has revised Nigeria’s credit outlook to Positive from Stable, citing stronger foreign exchange reserves, easing of inflation and improvements in the country’s economic policy framework.
The Positive Outlook means a higher rating awaits the country in the future if the economy continues to improve and the government sustains its reforms.
However, the agency retains Nigeria’s credit rating at ‘B’, meaning it has not upgraded the country’s rating yet.
The decision, announced on October 9, comes as Nigeria’s gross foreign exchange reserves rose to $55 billion in September 2026, from $32 billion in mid-April 2024.
The development represents an increase of $22.9 billion, or about 71.6 per cent, over the period, strengthening the country’s capacity to meet external obligations and withstand pressure on its foreign exchange market.
Finance and Coordinating Minister of the Economy, Taiwo Oyedele, yesterday, welcomed the Fitch Rating on behalf of the federal Government.
He called it an indication of growing confidence in the direction of Nigeria’s economic reforms.
Fitch attributed the improved outlook to greater flexibility in the naira exchange rate, declining inflation and the faster-than-expected accumulation of foreign reserves.
The agency also identified increased formalisation of foreign exchange transactions, strong portfolio investment inflows, higher export earnings and remittances as factors supporting the growth in reserves.
It said improvements in the quality of the reserves had strengthened Nigeria’s ability to withstand external shocks, while projecting a current account surplus of 6.4 per cent of gross domestic product in 2026.
The current account measures the flow of money into and out of a country through trade in goods and services, investment income and transfers. A surplus indicates that the country is earning more from these transactions than it is spending abroad.
Fitch’s assessment provides fresh support for the government’s argument that its economic reforms are beginning to improve Nigeria’s external position, although sustaining the gains will depend on continued foreign exchange inflows, stronger production and sound economic management.
The agency expects the economy to grow faster this year, forecasting real gross domestic product growth of 4.3 per cent in 2026, compared with four per cent in 2025.
It projects that growth will remain above four per cent in both 2027 and 2028, driven mainly by activities outside the oil sector.
The forecast suggests that agriculture, manufacturing, trade, telecommunications and other non-oil activities are expected to play an increasingly important role in expanding the economy.
Fitch also expects average inflation to decline to 15.4 per cent in 2026, less than half its 2024 level.
The projected moderation in inflation is another factor supporting the improved outlook.
However, the agency noted that inflation in Nigeria remains higher than in comparable countries, leaving households and businesses exposed to elevated living and operating costs.
On the oil sector, the agency noted that Nigeria had met its Organisation of Petroleum Exporting Countries (OPEC) production target of 1.5 million barrels per day since May 2026.
Higher crude oil production is important to the country because oil exports remain the main source of foreign exchange earnings and government revenue.
The expansion of domestic refining is also helping to reduce imports of refined petroleum products and the demand for foreign exchange needed to pay for them.
As more petroleum products are supplied locally, Nigeria could retain a larger share of the foreign exchange previously spent on fuel imports, provided domestic refineries maintain production and meet market demand.
A mix of stronger oil production, domestic refining, increased exports and remittance inflows is expected to support the country’s external position, although the durability of these gains will depend on developments in the global oil market and domestic production conditions.
Fitch’s decision follows other positive developments in Nigeria’s international credit assessments this year.
S&P Global Ratings upgraded Nigeria’s credit rating from ‘B-’ to ‘B’ in May, while Moody’s Ratings revised the country’s outlook to Positive in August.
Nigeria also returned to Frontier Market status under FTSE Russell’s classification, effective September 21, 2026.
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