By Atlantic Reports

The Federal Government has welcomed a reported revision of Nigeria’s credit rating outlook to positive by Fitch Ratings, while acknowledging continuing pressures from inflation, weak government revenue and high interest payments.

In a statement issued in Abuja on Saturday, the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said Fitch revised Nigeria’s Long-Term Issuer Default Rating outlook from stable to positive on Friday, while affirming the rating at ‘B’.

The outlook revision is distinct from a rating upgrade. Oyedele said it indicated the possibility of an upgrade if economic improvements and reform momentum were sustained.

Government cites stronger reserves

According to the minister’s account of Fitch’s assessment, greater exchange rate flexibility, moderating inflation and faster-than-expected foreign exchange reserve accumulation supported the positive outlook.

Oyedele said gross foreign reserves reached US$54.9 billion on 25 September, compared with US$32 billion in mid-April 2024.

He attributed the increase to stronger portfolio inflows, export receipts and remittances, alongside more foreign exchange transactions moving through formal channels.

The minister said improved reserve quality had strengthened Nigeria’s ability to withstand external shocks. He cited a projected current account surplus of 6.4 per cent of gross domestic product (GDP) in 2026.

Growth and inflation figures remain forecasts

Oyedele said Fitch forecast real GDP growth of 4.3 per cent in 2026, compared with four per cent in 2025, with growth expected to remain above four per cent in 2027 and 2028.

Non-oil activities were expected to drive much of that expansion, he said.

The minister also said crude oil production had met Nigeria’s Organisation of the Petroleum Exporting Countries quota of 1.5 million barrels a day since May.

He argued that increased domestic refining was reducing imports of refined petroleum products and associated demand for foreign exchange.

Average inflation was projected to moderate to 15.4 per cent in 2026, according to the statement. That remains a forecast, rather than a confirmed full-year outcome. Slower inflation would also mean prices rising less rapidly, rather than necessarily falling.

Debt servicing and revenue remain concerns

On public finances, Oyedele said Fitch expected tax reforms to increase non-oil revenue relative to GDP.

Government debt was projected to average 32 per cent of GDP between 2026 and 2028, below the 56 per cent median cited for countries rated ‘B’.

However, the minister acknowledged concerns about low government revenue and high interest payments. These pressures remain important to assessing the government’s capacity to finance public services and meet its obligations.

He said Fitch also recognised Nigeria’s liquid domestic debt market and bank recapitalisation exercise, noting that many banks had capital adequacy ratios above 20 per cent.

Reform gains face a household test

Oyedele cited other positive assessments during 2026, including a reported S&P Global Ratings upgrade to ‘B’ from ‘B-’ in May and a Moody’s outlook revision to positive in August.

He also said FTSE Russell returned Nigeria to Frontier Market status, effective 21 September 2026.

The minister presented these decisions as evidence of growing confidence in reforms under President Bola Tinubu, including fuel subsidy removal, exchange rate unification and tax changes.

He said the government’s medium-term ambition was to move towards investment-grade status and reduce borrowing costs, attract private investment and create jobs. Those remain policy objectives, rather than outcomes established by the outlook revision.

Oyedele pledged continued attention to tax implementation, spending efficiency, debt management and non-oil growth.

For households and small businesses, the practical measure of progress will be whether greater economic stability delivers more affordable essentials, reliable livelihoods and improved public services. The minister said food security, employment and human development would remain priorities in translating reforms into shared prosperity.

Atlantic Reports: Voices. People. Facts.