Fitch Ratings has upgraded its outlook on Nigeria’s credit rating to Positive from Stable, while affirming the country’s long-term issuer default ratings at ‘B’.

The rating action was announced on Friday, October 9, 2026, according to the Fitch Ratings Nigeria Rating Action Report.

The report said the brighter outlook reflects stronger foreign exchange reserves, ongoing economic reforms and easing inflation, although fiscal pressures and high debt-servicing costs remain concerns.

Fitch said Nigeria’s improved macroeconomic policy framework and stronger external financial position have made the economy more resilient to shocks.

“Fitch Ratings has revised the Outlook on Nigeria’s Long-Term Issuer Default Ratings (IDRs) to Positive from Stable and affirmed the IDRs at ‘B’,” the report read in part.

The agency noted that gross foreign exchange reserves climbed to $54.9 billion as of September 25, 2026, from $32 billion in mid-April 2024.

Fitch attributed the rise to portfolio inflows, export receipts, remittances and the formalisation of foreign exchange transactions.

Nigeria’s current account surplus is projected to reach 6.4 per cent of GDP in 2026, while reserve coverage is expected to hit 6.3 months of current external payments by the end of the year.

Net foreign exchange reserves rose to $34.8 billion at the end of 2025, from about $4 billion at the end of 2023, following a reduction in the Central Bank of Nigeria’s foreign exchange liabilities.

Fitch also pointed to improvements in oil production and domestic refining.

Crude oil production, excluding condensates, averaged 1.52 million barrels per day in the second quarter of 2026.

The ramp-up of the Dangote Petroleum Refinery and the rehabilitation of other refineries have cut refined fuel imports and reduced demand for foreign exchange.

On growth, Fitch forecasts Nigeria’s GDP to expand by 4.3 per cent in 2026, up from 4 per cent in 2025, and expects growth to stay above 4 per cent in 2027 and 2028.

The agency expects average annual inflation to ease to 15.4 per cent in 2026, which is less than half its 2024 level.

It noted, however, that this remains above the 5.6 per cent median for countries rated ‘B’.

Fitch described the CBN’s September monetary policy adjustment as calibrated easing.

It said, however, that keeping the cash reserve requirement at 45 per cent would continue to absorb naira liquidity and limit credit growth.

The agency also warned that high food and fuel prices, further petrol price increases and security risks could weaken household incomes and economic growth.

Despite the improved outlook, Fitch expects Nigeria’s fiscal deficit to widen to 3.6 per cent of GDP in 2026, from 3.1 per cent in 2025, partly because of higher government spending.

Tax reforms are expected to lift non-oil revenue to 7.5 per cent of GDP, equivalent to 66 per cent of government revenue, although implementation constraints could limit the gains.

Fitch projects that the general government interest-to-revenue ratio will average 27 per cent between 2026 and 2028, compared with a median of 14 per cent for ‘B’-rated countries.

The Federal Government’s ratio is expected to remain above 50 per cent.

According to the agency, sustained lower inflation, stronger reserves, continued reforms and better non-oil revenue mobilisation could support a future rating upgrade.

It added that weaker policy credibility, renewed foreign exchange pressures, reduced external financing or a sustained widening of the fiscal deficit could trigger negative rating action.

In September 2026, Fitch also warned that Nigeria’s use of Total Return Swaps and repurchase agreements could create transparency, liquidity and creditor-recovery risks.

The concern followed an earlier warning in June over a proposed $5 billion TRS facility with First Abu Dhabi Bank.

Separately, CBN Governor Olayemi Cardoso said Nigeria’s gross foreign exchange reserves had reached a record $55 billion, while net reserves rose to $46 billion.

Speaking on Thursday at the Nigeria-Asia Connectivity Dialogue, Cardoso said stability in the foreign exchange market and stronger reserves were helping to boost investor confidence.

Net reserves increased by $11.2 billion from $34.8 billion at the end of 2025.

The measure deducts near-term liabilities, including foreign exchange swaps and forward contracts, from the CBN’s holdings to show the funds available for immediate external obligations.

Cardoso also noted that net reserves had fallen below $1 billion at the height of Nigeria’s foreign exchange crisis.

Fitch’s decision leaves Nigeria’s credit rating at ‘B’.

The Positive outlook signals the potential for an upgrade if the improvements are sustained, but it does not mean the rating has already been upgraded.