Fitch Ratings has affirmed Nigeria’s long‑term foreign‑currency issuer default rating at “B” with a stable outlook. The agency cites the country’s large economy, developed domestic debt market and substantial oil and gas reserves as key supporting factors. However, it also notes that Nigeria’s economy is constrained by weak governance indicators, heavy reliance on hydrocarbons, high inflation, security challenges and structurally low non‑oil revenue.
The Fitch report highlights that the formalisation of foreign‑exchange activity has improved market functioning, resulting in higher FX liquidity and relative stability of the naira. The Central Bank of Nigeria’s commitment to reducing market distortions and strengthening macro‑economic stability is viewed positively, although concerns about data transparency and quality could impede progress toward a more predictable and credible policy framework.
Inflation remains a significant challenge, standing at 20 % in August 2025—well above the median for “B”‑rated peers. Fitch projects inflation to fall to 21 % in 2025 and 17 % in 2027, still above the projected “B” median of 5 % for 2027. The central bank has begun cutting policy rates, reducing them by 50 basis points to 27 % in September, with further cuts expected to support disinflation and stabilise the naira.
Nigeria’s external buffers are stronger than those of its peers, with foreign‑exchange reserves rising to $42 billion at the end of September. The current‑account surplus is expected to narrow in 2025‑2026, averaging 4.6 % of GDP, due to higher external interest payments and a recovery in non‑oil imports. The general‑government debt‑to‑GDP ratio is forecast to decline modestly to 37 % in 2025‑2027, below the “B” median of 51 %.
Fitch expects real GDP growth to increase to 4.2 % in 2025, driven by relative FX‑market stability and a rebound in oil production. The banking sector’s impaired‑loan ratio is projected to rise as banks reclassify some large stage‑2 loans as impaired, putting pressure on capital‑adequacy ratios. Nonetheless, restructuring and capital‑raising measures should enable most banks to exit forbearance by the end of 2025.
The affirmation of Nigeria’s “B” rating reflects the country’s significant economic challenges, including high inflation, weak governance and security concerns. The stable outlook indicates that Fitch expects Nigeria to maintain its current economic trajectory while making modest progress in addressing structural weaknesses. This outlook provides investors and stakeholders with a degree of certainty, underscoring the need for sustained efforts to strengthen Nigeria’s economic fundamentals.
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