Fitch Affirms Nigeria at ‘B’ Outlook stable

Fitch Ratings has affirmed Nigeria’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at ‘B’ with a stable outlook. 
According to Fitch, the rating reflects Nigeria’s large economy, a relatively developed and liquid domestic debt market, large oil and gas reserves and an improved monetary and exchange rate policy framework.
However, Fitch added that Nigeria’s credit rating is constrained by weak governance indicators, high hydrocarbon dependence, high inflation, security challenges and structurally low revenue relative to peers.
Ratings analysts reaffirmed that the authorities have continued to build on reforms implemented since May 2023 to restore macroeconomic stability and enhance policy credibility.
Recent measures by the Central Bank of Nigeria (CBN), including the removal of forex restrictions on the repatriation of oil export proceeds by international oil companies, should support further normalisation of the forex market.
The move is expected to improve confidence and support relative naira stability after a 40 per cent depreciation in 2024.
However, Fitch analysts expect modest depreciation in the near term amid rising fiscal pressures and heightened external risks, while data quality concerns continue to weigh on policy credibility.
Fitch highlighted that Nigeria’s gross forex reserves rose to $49.4 billion at end-March 2026, from $32 billion in mid-April 2024, and forecast a marginal decline to $47 billion at end-2026, reflecting higher spending pressures and external risks.
 However, analysts expect Nigeria’s foreign reserves to cover seven months of current external payments (CXP), well above the ‘B’ median of 4.3 months.
“We expect the current account surplus to widen in 2026, after narrowing modestly to 4.9 per cent of GDP in 2025 as higher hydrocarbon receipts, modest remittances and gains from lower oil-related imports more than offset high external debt interest payments and a recovery in non-oil imports”, Fitch said.
Official disclosure on the composition of the CBN foreign-currency balance sheet remains limited, but the CBN has made substantial progress in unwinding foreign exchange (forex) swaps with local banks.
It estimates net reserves at $35 billion at the end of 2025, up from about USD4 billion in 2023.