*Oyedele: Outlook additional validates FG’s tough however needed reforms
Ndubuisi Francis in Abuja
Citing the federal authorities’s ongoing coverage reforms and its elevated confidence that the present momentum is not going to be disrupted by the overall election due in early 2027, Fitch Ratings has revised the outlook for Nigeria’s Long-Term Issuer Default Ratings (IDRs) from Stable to Positive, affirming the score at ‘B’.
The international rankings company launched its newest stance on the nation on the weekend, underscoring key drivers behind its revision of Nigeria’s Outlook, together with anticipated coverage continuity; stronger exterior buffers; a restrictive financial stance; decreased inflation; and better oil manufacturing and refining capability.
Reacting to Fitch’s constructive outlook, the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, reaffirmed the federal authorities’s resolve to maintain reform momentum and a disciplined, market-reflective, and clear overseas trade regime.
According to Fitch, the Outlook revision mirrored ongoing reform of Nigeria’s coverage framework and its elevated confidence that the momentum is not going to be disrupted by upcoming elections.
It affirmed that the financial and trade fee reforms had supported better naira flexibility, disinflation and faster-than-expected FX reserve accumulation, whereas improved reserve high quality enhances resilience to shocks.
Fitch careworn that the continued reform implementation was strengthening financial coverage transmission and will assist additional disinflation, though inflation will stay nicely above Nigeria’s friends.
It mentioned, “Nigeria’s rankings replicate its giant economic system, a comparatively developed and liquid home debt market, giant oil and fuel reserves and an improved macroeconomic coverage framework.
“The rating is constrained by weak governance indicators, high hydrocarbon dependence, high inflation, security challenges and structurally low government revenue relative to peers.”
On the anticipated coverage continuity metric, Fitch mentioned, “The incumbents are nicely positioned to win the early 2027 elections due to the ruling get together’s management of nearly all of Nigeria’s 36 states and a fragmented opposition.
“As a result, we expect broad economic policy continuity, including in relation to reforms that have contributed to improved policy credibility, higher external liquidity and enhanced resilience to external shocks.
“Risks to our baseline stem from significant policy slippage, including fiscal loosening, weaker capital inflows or major social instability.”
It additionally noticed that gross FX reserves rose to $54.9 billion on September 25, 2026, from $32 billion in mid-April 2024, supported by elevated formalisation of FX transactions, robust portfolio inflows and better export receipts and remittances.
“We forecast the current account surplus will widen to 6.4% of GDP in 2026, but we expect it to narrow in 2027 amid our expectation that global oil prices will fall to 70/barrel from 87/barrel in 2026,” Fitch mentioned.
Providing extra context, it identified that reserve high quality had improved because the Central Bank of Nigeria (CBN) decreased its FX liabilities, with web FX reserves at $34.8 billion on the finish of 2025 from about $4 billion on the finish of 2023.
“We expect the naira to trade broadly around the current level through end-2026, despite the prospect of lower oil prices in 2027-2028,” it careworn.
On restrictive financial stance and decreased inflation, Fitch considered the CBN’s September coverage adjustment as a calibrated easing in line with bettering coverage transmission.
Fitch mentioned it anticipated the CBN to stay cautious amid excessive meals and gas costs and exterior dangers, whereas forecasting common annual inflation to average, due to naira stability and tight financial coverage, to 15.4 per cent in 2026, lower than half the 2024 degree, however nicely above the forecast ‘B’ median of 5.6 per cent.
On greater oil manufacturing and refining, Fitch famous that crude oil manufacturing, excluding condensates, rose 10 per cent quarter -on-quarter (Q-on-Q) in 2Q26 and has met Nigeria’s 1.5mbpd OPEC goal since May 2026, averaging 1.52mbpd.
“We count on manufacturing to stay round this degree within the close to time period, supported by improved safety and home funding, however beneath pre-pandemic ranges.
“Dangote refinery’s ramp-up and rehabilitation of different services main to elevated manufacturing of refined merchandise has decreased refined oil imports and FX demand, however restricted home crude provide will partly preserve reliance on imported crude, Fitch mentioned.
Overall, Fitch famous that Nigeria has a low World Bank Governance Indicators (WBGI) rating on the twentieth percentile, reflecting weak institutional capability, uneven utility of the rule of legislation and a excessive degree of corruption.
Despite Nigeria’s constructive outlook, the rankings company outlined draw back dangers or sensitivities that might individually or collectively lead to unfavourable score motion/downgrade.
They embrace: A deterioration within the credibility and consistency of financial and financial policymaking and FX administration, leading to renewed inflationary pressures and better distortions within the FX market.
It additionally cited renewed exterior liquidity stress arising, for instance, due to decrease oil costs and extra constrained exterior financing sources.
Fitch additionally cited sustained widening of the fiscal deficit, which considerably will increase the debt/GDP burden and weakens financing prospects.
Oyedele: Outlook Further Validates FG’s Difficult But Necessary Reforms
Reacting to Fitch’s constructive outlook, the Minister of Finance and Coordinating Minister of the Economy, Mr. Oyedele, reaffirmed the federal authorities’s willpower to maintain its reform momentum and a disciplined, market-reflective, and clear overseas trade regime.
Oyedele mentioned Fitch’s newest motion adopted constructive score actions by all three main worldwide score companies on Nigeria in 2026, citing S&P Global Ratings, which upgraded Nigeria to ‘B’ from ‘B-‘ in May, and Moody’s Ratings, which revised its outlook to Positive in August.
He famous that individually, FTSE Russell returned Nigeria to Frontier Market standing with impact from September 21, 2026, including that taken collectively, these choices mirrored a converging and more and more beneficial evaluation of Nigeria’s reform trajectory.
The minister defined that Fitch’s Positive Outlook additional validated the tough however needed reforms carried out underneath the present administration, saying its medium-term ambition was to place Nigeria firmly on the trail to funding grade.
Oyedele assured that the administration would, amongst different issues, deal with elevating income via full implementation of the brand new tax legal guidelines and environment friendly tax administration, and enhance fiscal governance via spending effectivity, price range execution, and clear debt administration.
According to him, the federal government would pursue structural reforms that assist non-oil progress and financial diversification and speed up the conversion of macroeconomic stability into shared prosperity via meals safety, first rate jobs, human growth, and assist for small companies.
