Nigeria’s growing foreign reserves and continued economic reforms have improved investors’ confidence, but high debt costs, inflation and weak government revenue remain major challenges for the society and businesses.
Fitch Ratings has revised Nigeria’s economic outlook from Stable to Positive while affirming the country’s long-term sovereign credit rating at ‘B’, citing stronger foreign reserves, monetary reforms and expectations that current economic policies will continue.
The decision, announced on October 9, 2026, follows similar positive action by Moody’s in August and a sovereign rating upgrade by S&P in May, marking a favourable shift in how the three major international credit rating agencies assess Nigeria’s economic direction.
According to Fitch, Nigeria’s gross foreign exchange reserves rose to $54.9 billion as of September 25, 2026, from $32 billion in April 2024. Net reserves also increased from approximately $4 billion at the end of 2023 to $34.8 billion at the end of 2025, strengthening the country’s capacity to meet external financial obligations. The agency forecasts a current account surplus of 6.4 per cent of gross domestic product (GDP) and economic growth of 4.3 per cent in 2026.
However, the improved outlook has yet to translate into easier living conditions for many Nigerians. Across the country, households continue to contend with high food prices, transport fares, electricity costs and pressure on disposable incomes, while small businesses struggle with operating expenses and limited purchasing power.
Fitch projects average inflation of 15.4 per cent in 2026, highlighting the continuing challenge of stabilising prices despite progress in foreign exchange management and monetary policy reforms.
Government finances also remain under pressure. The agency expects interest payments to consume an average of 27 per cent of government revenue between 2026 and 2028, compared with a median of 14 per cent among comparable countries. Non-oil revenue is projected at just 7.5 per cent of GDP, limiting the government’s ability to fund infrastructure, healthcare, education and other essential public services.
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