Fitch Upgrades Nigeria’s Credit Rating to Stable Amid Reforms and Economic Improvements
Fitch Ratings has upgraded Nigeria’s credit rating to ‘B’ with a stable outlook, reflecting the country’s economic progress following significant reforms. These reforms, including the removal of long-standing fuel subsidies and the adoption of a more market-driven exchange rate, have strengthened Nigeria’s macroeconomic stability. Despite ongoing domestic challenges, such as high inflation and external risks, the improved rating underscores enhanced investor confidence and economic resilience.
The stable outlook is tied to expectations that Nigeria’s macroeconomic policy will continue to support exchange rate improvements and lower inflation. Despite inflation averaging 22% in 2025, Fitch anticipates continued efforts by the Central Bank of Nigeria (CBN) to maintain monetary policy stability, despite short-term depreciation risks in the currency. The recent introduction of an electronic FX matching platform and policy tightening has helped stabilize Nigeria’s foreign exchange market and boosted net inflows.
Nigeria’s oil production is also on the rise, with production expected to average 1.43 million barrels per day in 2025, up from 1.34 million in 2024. This growth is driven by improved surveillance and investment from local oil companies. The Dangote refinery is also expected to increase its capacity, contributing to domestic oil consumption and reducing import costs. However, oil remains critical to Nigeria’s foreign exchange earnings, with the government’s $75 oil price target still unmet.
Despite these positive changes, Nigeria’s budget deficit is projected to widen in the next two years, averaging 4.2% of GDP. This will be driven by increased spending on wages, security, and debt servicing, compounded by political uncertainties ahead of the 2027 elections. Meanwhile, government debt as a percentage of GDP is expected to marginally decline due to robust economic growth, but the country faces challenges in managing its public finances, as indicated by a recent delay in debt payments.
Source: Business day