NIGERIA · CREDIT RATINGS
Key Facts
- —The country Nigeria is Africa’s most populous nation and a major oil exporter.
- —What happened Fitch revised Nigeria’s outlook to positive on Friday, citing reforms.
- —The rating Affirmed at ‘B’, five notches below investment grade.
- —The numbers Gross reserves reached US$54.9 billion on 9 September, Fitch said.
- —What it means for you A later upgrade could cut Nigeria’s dollar borrowing costs.
- —Still open Fitch’s new inflation, growth and debt forecasts are unpublished locally.
Fitch kept Nigeria’s credit rating at ‘B’ but signalled an upgrade may follow, citing reforms that rebuilt the country’s dollar reserves.
Fitch Ratings has raised the outlook on Nigeria’s long-term credit rating to positive from stable, while keeping the rating itself at ‘B’. The agency issued the decision on Friday, 9 October, Premium Times, an Abuja-based daily newspaper, reported on Saturday.
Fitch said monetary and exchange-rate reforms have made the naira more flexible, cut inflation and sped up reserve rebuilding. For US holders of Nigerian dollar bonds, a positive Fitch outlook signals a possible upgrade to ‘B+’ within one to two years.
Fitch is one of the three big credit rating agencies, alongside Moody’s and S&P Global, whose grades guide global bond investors. A ‘B’ rating sits five notches below investment grade, in the band Fitch describes as highly speculative.
Moody’s revised its Nigeria outlook to positive in late August, Sunday World, a South African weekly, reported. S&P Global upgraded Nigeria to ‘B’ in May.
Why Fitch Turned More Positive on Nigeria
Fitch said the outlook change reflects the ongoing reform of Nigeria’s policy framework. It also cited its “increased confidence that momentum will not be disrupted by upcoming elections,” according to Premium Times.
Nigeria holds general elections early next year. President Bola Tinubu of the governing All Progressives Congress took office in May 2023 and let the currency float weeks later.
Fitch said it expects broad continuity in economic policy. Premium Times added that the agency sees the incumbents on track to win, given the ruling party’s control of most states.
According to Fitch, the reforms have given the naira more flexibility and lowered inflation. It said better-quality reserves now strengthen Nigeria’s ability to absorb external shocks.
The agency expects the currency to trade roughly at its current level through the end of 2026. It holds that view even though it expects weaker oil prices in 2027 and 2028.
One US$ bought about 1,331 naira on Saturday, 10 October, based on open.er-api.com market rates. Nigeria’s currency lost most of its value against the dollar after the 2023 float before stabilising.
Reserves Beat Fitch’s Own April Forecast
Gross foreign-exchange reserves rose to US$54.9 billion on 9 September, from US$32 billion in mid-April 2024, Fitch said. That is an increase of about 72% in less than two and a half years.
Fitch credited more formal foreign-exchange trading, portfolio inflows, higher export receipts and stronger remittances from Nigerians abroad. It expects reserves to cover 6.3 months of current external payments by the end of 2026.
The agency sees that cover staying above the level of similarly rated peers in 2027 and 2028. Most countries aim to hold at least three months of import cover as a safety buffer.
The September figure is well ahead of Fitch’s own view six months ago. In April, when it kept the outlook stable, Fitch forecast that reserves would slip to US$47 billion by the end of 2026.
That April forecast was reported at the time by ThisDay and TheCable, two Nigerian outlets. Reserves stood at US$49.4 billion at the end of March, so the September level was about US$5.5 billion higher.
Fitch flagged one caveat: large net errors and omissions in the balance of payments still cloud the external picture. These are flows that statisticians cannot trace to a source, and they can mask capital flight.
What Still Weighs on the Fitch Outlook
Fitch listed Nigeria’s strengths as a large economy, a relatively developed and liquid local debt market and substantial oil and gas reserves. It also credited a stronger macroeconomic policy framework.
The constraints are long-standing: weak governance indicators, heavy reliance on hydrocarbons, sticky inflation and security challenges. Government revenue also remains structurally low compared with peers.
Fitch expects inflation to keep falling but to stay well above that of similarly rated countries. In April, it forecast average 2026 inflation of about 16%, against a ‘B’ median of 5.5%, Business Post reported.
Low revenue matters because Nigeria spends a large share of its income on interest. Fitch put that ratio at about 33% in April, far above comparable sovereigns, according to ThisDay.
The agency named a restrictive monetary policy stance, moderating inflation and higher oil production and refining output as key drivers. In April, it also warned that social, security and election spending could widen the deficit towards 5% of GDP.
What It Means for US Readers
Nigeria borrows in US dollars through Eurobonds sold to international investors. A better outlook can narrow the extra yield investors demand over US Treasuries, lowering future borrowing costs.
For US companies in Nigeria, steadier reserves mean easier access to dollars for imports, dividends and profit transfers. In 2024, Fitch said the central bank had cleared US$4.5 billion of a backlog of unpaid currency forwards.
US energy companies, including Chevron, operate oil and gas fields in Nigeria. The rating itself is unchanged, so funds limited to investment-grade debt remain shut out of Nigerian bonds.
What Is Not Known
No reaction from Nigeria’s Finance Ministry, Debt Management Office or central bank appeared in the local reports published on Saturday. Fitch’s updated forecasts for inflation, growth, public debt and the budget deficit were also not included.
It is not known whether Moody’s or S&P Global will follow with an upgrade. How the coming election campaign will affect public spending is also unclear.
What Comes Next
Fitch has reviewed Nigeria roughly every six months, with actions in October 2025, April 2026 and now October 2026. If that pattern holds, the next review would fall around April 2027, close to the elections.
In April, Fitch said sustained disinflation and stronger revenue collection could lead to an upgrade. A positive Fitch outlook shows the likely direction of a rating, but it does not make an upgrade certain.
Frequently Asked Questions
What did Fitch decide on Nigeria?
Fitch revised the outlook on Nigeria’s long-term credit rating to positive from stable on Friday, 9 October. It kept the rating itself at ‘B’.
Is a positive outlook the same as an upgrade?
No. It signals that an upgrade is possible within one to two years if current trends hold.
Why did Fitch change the outlook?
It cited monetary and exchange-rate reforms that made the naira more flexible, lowered inflation and rebuilt reserves. It also said it was more confident that elections would not disrupt the reforms.
How large are Nigeria’s foreign reserves?
Fitch put gross reserves at US$54.9 billion on 9 September, up from US$32 billion in mid-April 2024. It expects them to cover 6.3 months of external payments by the end of 2026.
What does this mean for US investors?
A better outlook can lower Nigeria’s dollar borrowing costs and ease foreign firms’ access to dollars. The ‘B’ rating is still below investment grade.
Sources: Premium Times, Fitch rating action of 9 October 2026; ThisDay, Fitch April 2026 review; TheCable, Fitch April 2026 reserves forecast; Business Post, Fitch April 2026 inflation forecast; Channels Television, Fitch October 2025 review; Sunday World, Moody’s August 2026 action; Arise News, Fitch May 2024 review; open.er-api.com exchange rates (all accessed 10 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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