Fitch Gives Tinubu Fresh Economic Boost as Nigeria’s Outlook Turns Positive

Fitch Ratings has revised Nigeria’s economic outlook from stable to positive, citing improvements in foreign exchange reserves, monetary policy, exchange rate reforms and moderating inflation under President Bola Ahmed Tinubu.

The international credit rating agency announced the decision on Friday, October 9, 2026, while affirming Nigeria’s long-term issuer default ratings at ‘B’. The revised outlook signals the possibility of a future credit rating upgrade if the country sustains its economic reforms and strengthens its financial position.

The Federal Government disclosed the development on Saturday through the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who described the assessment as an endorsement of the administration’s economic reform programme.

Fitch’s decision reflects growing confidence in Nigeria’s macroeconomic policy framework and external financial position. The agency also expressed confidence that the government would maintain its reform momentum despite the approach of the 2027 general elections.

One of the key factors behind the positive outlook is the significant improvement in Nigeria’s foreign exchange reserves, which reportedly reached $54.9 billion as of September 25, 2026, compared with approximately $32 billion in mid-April 2024.

Fitch attributed the increase to stronger activity in the formal foreign exchange market, portfolio investment inflows, higher export receipts and remittances from Nigerians living abroad.

The agency projected that Nigeria’s current account surplus would reach 6.4 per cent of gross domestic product (GDP) in 2026. It also expects foreign exchange reserves to cover approximately 6.3 months of current external payments by the end of the year, providing a stronger buffer against external economic shocks.

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Nigeria’s economic growth prospects also informed the revised outlook. Fitch forecast that the country’s real GDP would expand by 4.3 per cent in 2026, up from 4.0 per cent in 2025, with growth expected to remain above four per cent in 2027 and 2028.

The agency expects non-oil activities to remain a major driver of economic expansion, reflecting the importance of sectors beyond crude oil to Nigeria’s long-term economic prospects.

On inflation, Fitch projected average annual inflation of 15.4 per cent in 2026, significantly below the levels recorded in 2024. It attributed the expected moderation partly to greater stability in the naira and the effects of restrictive monetary policy.

However, the agency cautioned that inflation would remain high compared with countries with similar credit ratings, meaning that the cost of living and pressure on household budgets would continue to pose challenges.

Developments in the oil sector also contributed to the improved assessment. Fitch reported that crude oil production, excluding condensates, increased by 10 per cent quarter-on-quarter in the second quarter of 2026, while output reportedly met Nigeria’s OPEC target of 1.5 million barrels per day from May.

The expansion of domestic refining capacity, particularly the ramp-up of the Dangote refinery and the rehabilitation of other facilities, has also helped reduce reliance on imported refined petroleum products and associated foreign exchange demand.

The Federal Government attributed the improved outlook to major policy decisions introduced under Tinubu, including the removal of the petrol subsidy, foreign exchange market reforms and changes to the tax system.

Oyedele said the administration would continue implementing the reforms to reduce Nigeria’s cost of borrowing, attract private investment and encourage job creation.

The government also pledged to sustain a transparent, market-reflective foreign exchange regime, improve tax administration, strengthen debt management and increase non-oil revenue.

Despite the positive assessment, Fitch identified several risks that could limit Nigeria’s economic progress. These include weak governance indicators, dependence on hydrocarbons, persistent inflation, security challenges and low government revenue relative to the size of the economy.

The agency also projected that Nigeria’s general government fiscal deficit would widen to 3.6 per cent of GDP in 2026 amid spending pressures. Although tax reforms could improve revenue collection, implementation challenges may limit the gains.

Fitch forecast that general government debt would average 32 per cent of GDP between 2026 and 2028, below the 56 per cent median for countries in the ‘B’ rating category.

The positive outlook does not amount to an immediate upgrade of Nigeria’s credit rating. Rather, it indicates that Fitch could raise the rating in the future if economic reforms continue, macroeconomic stability improves and fiscal pressures ease.

The latest assessment follows other positive developments in Nigeria’s credit standing in 2026. S&P Global Ratings upgraded Nigeria’s rating from ‘B-’ to ‘B’ in May, while Moody’s Ratings revised its outlook on the country to positive in August, according to the Federal Government.

For the Tinubu administration, the latest Fitch decision provides an important boost to its economic reform agenda. However, the ultimate test will be whether improvements in economic indicators translate into tangible benefits for Nigerians through lower inflation, stronger purchasing power, increased employment and sustainable business growth.