International rating agency Fitch Ratings has revised the outlook on Nigeria’s long-term issuer default ratings from stable to positive. The agency affirmed the ratings at B, Premium Times Nigeria reports.
Fitch explained that the outlook revision reflects further economic policy reforms and greater confidence that the pace of reforms will not be disrupted ahead of the country’s general elections. The agency noted that monetary and exchange-rate reforms have contributed to a more flexible naira exchange rate, slowing inflation and faster-than-expected growth in foreign exchange reserves.
Growth in foreign exchange reserves
According to Fitch’s assessment, Nigeria’s external positions have improved: gross foreign exchange reserves increased from $32 billion in mid-April 2024 to $54.9 billion as of September 9, 2026. The agency cited greater formalization of foreign exchange transactions, substantial portfolio investment inflows, and increased export earnings and remittances among the factors.
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Fitch expects reserves to cover 6.3 months of current external payments by the end of 2026. The agency forecasts that this indicator will remain above the average level of peer countries in 2027–2028, although large net errors and omissions in the statistics, in its view, continue to create uncertainty.
Rating factors and constraints
The agency also expects the naira’s exchange rate to generally remain close to its current level by the end of the year, despite the likelihood of lower oil prices in 2027–2028. Fitch believes that continued reforms are strengthening the monetary policy transmission mechanism and should support a further slowdown in inflation, which, according to the agency’s forecast, will still be substantially higher than in peer countries.
Fitch listed the size of Nigeria’s economy, its relatively developed and liquid domestic debt market, substantial oil and gas reserves, and strengthening macroeconomic policies among the country’s strengths. At the same time, the agency cited weak governance indicators, dependence on hydrocarbons, persistent inflation, security challenges and structurally low government revenues as constraints.
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