Fitch Ratings has confirmed Nigeria’s long-term foreign currency sovereign rating at “B” with a stable outlook, highlighting progress in economic reforms while also pointing out persistent vulnerabilities.
In its report dated April 10, Fitch Ratings states that Nigeria’s rating reflects the size of the economy, a relatively developed domestic debt market, significant hydrocarbon resources, and recent improvements in the monetary and exchange rate framework. However, the rating is constrained by high inflation, a strong dependence on oil, weak governance indicators, security challenges, and structurally low public revenues.
Reforms implemented since May 2023, including the partial liberalization of the foreign exchange market by the Central Bank of Nigeria, have helped restore investor confidence after a 40% depreciation of the naira in 2024.
Fitch anticipates a moderate depreciation in the short term, amid budgetary pressures and increased external risks.
Foreign exchange reserves increased to $49.4 billion at the end of March 2026, up from $32 billion in mid-April 2024, before slightly declining to around $47 billion by the end of 2026, according to the agency’s projections. They are expected to cover approximately 7 months of current external payments, above the median for countries rated “B”.
Fitch estimates that net reserves reached $35 billion at the end of 2025, up from around $4 billion in 2023, reflecting a reduction in foreign exchange swap operations with local banks.
On the budget front, the agency forecasts a widening of the public deficit to nearly 5% of GDP in 2026, driven by increased social, security, and electoral expenditure.
Fitch notes that the government is expected to cover its short-term external financing needs through a combination of official and commercial borrowing, with estimated external repayments of $4.6 billion over 2026-2027.
The agency also forecasts a slight widening of the current account surplus in 2026, after reaching 4.9% of GDP in 2025, supported by higher revenues and a decrease in oil-related imports.
