Fitch Ratings maintains Nigeria’s sovereign rating at ‘B’ with a stable outlook, commending the progress made in exchange rate reforms and the strengthening of foreign exchange reserves. This decision reflects gradual macroeconomic stabilization despite persistent challenges related to inflation and oil dependency.

Background to Fitch’s Decision

The rating agency highlighted the significant increase in Nigeria’s foreign exchange reserves, from USD 32 billion in April 2024 to USD 49.4 billion in March 2026, thanks to improved exchange rate management and increased transparency at the Central Bank of Nigeria (CBN). These advances are a testament to the monetary and fiscal reforms implemented since mid-2023 under the administration of Bola Ahmed Tinubu, including the liberalization of the naira and the end of deficit monetization.

The stable outlook indicates that Fitch anticipates neither imminent deterioration nor improvement, but recognizes growth potential supported by relative exchange rate stability and a recovery in oil revenues.

Encouraging macroeconomic indicators

Fitch projects Nigerian GDP growth of 4.1% in 2026, driven by the relative stability of the naira, increased oil exports, and improved domestic refining capacity that reduces fuel imports. Inflation, while still high, is expected to continue moderating after peaking at 33% in 2024 and falling to around 14-16% in 2025-2026.

These projections align with government estimates of 4.68% growth in 2026, supported by lower inflation, controlled exchange rate volatility (naira around 1,400-1,500 to USD 1), and ongoing fiscal reforms. Nigeria also benefits from an expected current account surplus in 2026, thanks to stable remittances and the gradual diversification of its non-oil economy.

Strengths and Structural Weaknesses

Among the positives, Fitch highlights Nigeria’s diversified economic base – Africa’s largest economy by GDP – and a relatively developed domestic bond market. Oil and gas reserves remain a major asset, especially with favorable crude oil prices.

However, weaknesses persist: weak governance (poor rankings in terms of corruption and the rule of law), excessive dependence on hydrocarbons, high inflation, and security risks that are hindering non-oil growth. Nigeria still needs to improve tax revenue mobilization to reduce its budget deficit.

Outlook and Implications for Investors

This confirmation validates the trajectory of reforms and strengthens the confidence of international investors, as evidenced by the influx of capital (up 88% in 2025 according to some sources). A future improvement in the rating (‘B+’) could occur with sustained disinflation and better fiscal performance, while policy inconsistency or external financing stress would lead to a downgrade.

For Nigeria, this decision offers an opportunity to accelerate investment in infrastructure, energy, and economic diversification, while simultaneously strengthening external buffers.