Fitch Revises Nigeria’s Outlook to Positive as Oil Output Hits OPEC Target and Inflation Projected at 15.4 Percent

Fitch Ratings has revised Nigeria’s sovereign credit outlook from Stable to Positive, citing stronger foreign-exchange reserves, greater exchange-rate flexibility, moderating inflation and expectations that economic reforms will continue.

The agency affirmed Nigeria’s long-term issuer default rating at B on October 9, 2026, leaving the rating unchanged but signaling that an upgrade could follow if current trends are sustained.

A major factor behind the revised outlook is the growth in Nigeria’s gross external reserves, which stood at 54.9 billion dollars as of September 25, 2026, compared with 32 billion dollars in mid-April 2024.

Fitch attributed the accumulation to stronger portfolio investment inflows, higher export receipts and remittances, alongside increased formalisation of foreign exchange transactions.

Fitch also projected that Nigeria’s real GDP would grow by 4.3 percent in 2026, up from 4 percent in 2025, with growth expected to remain above 4 percent in 2027 and 2028, driven largely by non-oil activities.

On inflation, Fitch forecast an average rate of 15.4 percent in 2026, less than half its 2024 level, though it cautioned that this remains above the 5.6 percent median for countries rated B.

Recent data from the National Bureau of Statistics showed headline inflation easing marginally to 15.39 percent in August 2026, from 15.43 percent in July.

The agency noted that crude oil production excluding condensates averaged 1.52 million barrels per day in the second quarter of 2026, meeting the country’s OPEC target of 1.5 million barrels per day since May.

The expansion of domestic refining is helping reduce imports of refined petroleum products and the associated demand for foreign exchange.

Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele said the positive outlook indicated the possibility of a rating upgrade if current economic trends and reform momentum were sustained.

“A positive outlook signals that the rating could be raised if current trends are sustained,” Oyedele said.

He noted that with this action, all three major international rating agencies have taken positive rating actions on Nigeria in 2026, with S&P Global Ratings upgrading Nigeria to B from B- in May and Moody’s revising its outlook to Positive in August.

The minister acknowledged that the government remained conscious of challenges highlighted by Fitch, particularly elevated inflation, weak revenue mobilisation and the high proportion of government revenue consumed by interest payments.

Fitch expects general-government interest payments to average 27 percent of revenue between 2026 and 2028, compared with a median of 14 percent for sovereigns rated B.

Oyedele said the administration’s medium-term ambition was to place Nigeria firmly on the path to investment-grade status, adding that the objective of the reforms extended beyond improving credit ratings to lowering the cost of capital, attracting private investment and creating jobs.