Fitch Revises Nigeria's Outlook to Positive on Policy Reforms

Fitch Ratings has revised Nigeria's Long-Term Issuer Default Ratings (IDRs) outlook from Stable to Positive, while affirming the rating at 'B'. The global ratings agency announced its latest stance at the weekend, citing the federal government’s ongoing policy reforms. Nigeria's Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, acknowledged the positive outlook, reaffirming the government's commitment to sustaining reform momentum.

The outlook revision reflects Fitch's increased confidence that the current reform momentum will not be disrupted by the general election due in early 2027. Key drivers for the revision include expected policy continuity, stronger external buffers, a restrictive monetary stance, and reduced inflation. Fitch also highlighted higher oil production and refining capacity as contributing factors to the improved outlook.

Nigeria's gross foreign exchange (FX) reserves significantly increased to $54.9 billion on September 25, 2026, from $32 billion in mid-April 2024. Net FX reserves also improved to $34.8 billion at the end of 2025, up from approximately $4 billion at the end of 2023. Fitch forecasts the current account surplus to widen to 6.4% of GDP in 2026, while average annual inflation is expected to moderate to 15.4% in 2026. Crude oil production, excluding condensates, has met Nigeria’s 1.5 million barrels per day (mbpd) OPEC target since May 2026, averaging 1.52 mbpd.

This positive outlook matters for investors as it signals strengthening monetary policy transmission and enhanced resilience to external shocks, supported by improved policy credibility. The agency expects broad economic policy continuity, given the ruling party's strong position for the early 2027 elections. While acknowledging challenges like high inflation and weak governance indicators, the revision suggests a more stable and predictable economic environment.

Minister Oyedele reiterated the federal government's resolve to maintain its reform trajectory and a disciplined, market-reflective, and transparent foreign exchange regime. Fitch, however, outlined potential downside risks, including a deterioration in policy credibility, renewed external liquidity stress, or a sustained widening of the fiscal deficit. These factors could individually or collectively lead to a negative rating action or downgrade in the future.