Fitch upgrades Nigeria to B on back of string of reform measures

Nigeria’s credit rating was upgraded to B by Fitch Ratings, remaining in the speculative-grade category, citing improved policy credibility and reduced near-term risks to macroeconomic stability.

“The upgrade reflects increased confidence in the government’s broad commitment to policy reforms implemented since its move to orthodox economic policies in June 2023, including exchange rate liberalisation, monetary policy tightening and steps to end deficit monetisation and remove fuel subsidies,” Fitch said in a statement Friday.

The rating agency in May lifted its credit outlook for Africa’s largest oil producer to positive from stable, citing government efforts to restore economic stability, while leaving the rating on its long-term foreign currency debt at B-.

Single B ratings are defined as below investment grade and highly speculative.

Nigerian President Bola Tinubu has made significant policy changes, including phasing out costly subsidies for fuel and allowing the naira to trade more freely on the foreign exchange market. The reforms were welcomed by international observers including the World Bank but caused pain at home by sending inflation soaring.
The upgrade comes as Nigeria faces heightened budget strains caused by a slide in the price of oil, the mainstay of the nation’s economy which funds around 50% of the federal budget and provides the bulk of its foreign exchange earnings.

The budget assumes oil prices of $75 per barrel but these slumped this week to $63 per barrel after US President Donald Trump’s trade war fanned fears of a slowdown in global economic growth.