Fitch Revises Nigeria Outlook to Positive on Reserves, Reforms

Fitch Ratings revised Nigeria's credit outlook from stable to positive on October 9 while affirming the long-term issuer default rating at 'B'. The agency cited stronger external buffers, greater naira flexibility, disinflation and faster-than-expected reserve accumulation as key drivers.

Gross foreign exchange reserves rose to $54.9 billion as of September 25, up from $32 billion in mid-April 2024. The increase reflects improved formal FX transactions, strong portfolio inflows, higher export receipts and remittances.

“The incumbents are well positioned to win the early 2027 elections due to the ruling party's control of the majority of Nigeria's 36 states.”

Fitch projects a current account surplus of 6.4% of GDP in 2026 and real GDP growth of 4.3% this year, remaining above 4% through 2028 driven by non-oil activity. Crude oil production has met the 1.5 million bpd OPEC target since May 2026.

Finance Minister Taiwo Oyedele said the outlook validates the government's reforms including petrol subsidy removal, FX market unification and tax reforms. Fitch noted the ruling party's control of most states positions incumbents well for the early 2027 election, supporting expected policy continuity.

Constraints remain: weak governance indicators, high hydrocarbon dependence, elevated inflation, security challenges and structurally low government revenue relative to peers. A positive outlook does not guarantee an upgrade; sustained reform momentum is required.