Fitch Ratings has revised Nigeria’s economic outlook to Positive from Stable, citing rising foreign exchange reserves and ongoing reforms, warned that weak government revenue and high interest costs remain key challenges.
The agency retained Nigeria’s long-term credit rating at ‘B’, signalling that further improvements will depend on the government’s ability to sustain reforms and strengthen public finances.
The Federal Ministry of Finance announced the decision in a statement on Saturday, signed by the Minister of Finance, Taiwo Oyedele.
According to the ministry, Nigeria’s gross foreign exchange reserves rose to $54.9 billion on September 25, 2026, from $32 billion in mid-April 2024.
Fitch attributed the increase to stronger investment inflows, higher export earnings and remittances, as well as improved foreign exchange market operations.
It projectes a current account surplus of 6.4 per cent of gross domestic product in 2026, saying the stronger reserves had improved the country’s capacity to withstand external shocks.
Despite the gains, Fitch identified low government revenue and high interest costs as continuing risks to Nigeria’s fiscal position.
It expects tax reforms to increase non-oil revenue, while general government debt is projected to average 32 per cent of GDP between 2026 and 2028, below the ‘B’ category median of 56 per cent.
The agency also forecasts average inflation of 15.4 per cent in 2026, less than half its 2024 level.
However, slower inflation does not mean prices will fall; it means they are expected to rise at a slower pace.
Fitch projects economic growth of 4.3 per cent in 2026, up from 4 per cent in 2025, driven largely by non-oil activities.
Whether this growth translates into better-paying jobs, stronger household incomes and improved living standards remains a key test of the reforms.
The agency noted that Nigeria’s crude oil production had met the Organisation of the Petroleum Exporting Countries’ target of 1.5 million barrels per day since May 2026.
It also says increased domestic refining was reducing refined petroleum imports and demand for foreign exchange.
Fitch further acknowledged Nigeria’s bank recapitalisation exercise, noting that many banks had capital adequacy ratios above 20 per cent.
However, stronger bank capital does not automatically guarantee affordable credit for households and small businesses.
The ministry said all three major international credit rating agencies had taken positive rating actions on Nigeria in 2026.
S&P Global Ratings upgraded the country to ‘B’ from ‘B-’ in May, while Moody’s Ratings revised its outlook to Positive in August.
Separately, FTSE Russell returned Nigeria to Frontier Market status, effective September 21, 2026.
The ministry attributed the improved assessments to reforms under President Bola Tinubu, including petrol subsidy removal, foreign exchange market reforms and tax changes.
The government says it aims to attract private investment, reduce borrowing costs and create jobs by sustaining the reforms.
However, the outlook’s longer-term significance will depend on whether stronger reserves and improved investor confidence translate into higher public revenue, manageable debt costs and tangible economic benefits for Nigerians.
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