Nigeria Eyes Investment-Grade Rating After Positive Credit Outlooks

By Adedapo Adesanya

Nigeria has now set its sights on getting an investment-grade status, following positive rating actions on the country by Fitch Ratings, S&P Global Ratings and Moody’s Ratings in 2026.

Fitch Ratings has joined S&P Global Ratings and Moody’s Ratings in taking a positive rating action on Nigeria, revising the country’s outlook to Positive from Stable and affirming its Long-Term Issuer Default Ratings at ‘B’.

The federal government said the development puts Nigeria on course for an investment-grade rating, which it now has in sight.

Business Post reports that for Nigeria to attain an investment grade, it must boost its sovereign credit rating from ‘B’ to at least ‘BBB-’ by Fitch Ratings and S&P Global Ratings, or ‘Baa3’ by Moody’s Ratings, to attain investment-grade status.

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said in Abuja on Saturday that the government’s medium-term ambition is to place Nigeria firmly on the path to investment grade.

He said the Fitch decision validates the reforms of the Tinubu administration, including the removal of the fuel subsidy, the unification of the exchange rate and the new tax laws.

According to Mr Oyedele, the government is pursuing the reforms not for the rating itself, but because they will lower Nigeria’s cost of capital, attract private investment and create decent jobs at scale.

The minister said the Fitch action means all three major international rating agencies have now taken positive rating actions on Nigeria in 2026.

S&P upgraded Nigeria to ‘B’ from ‘B-’ in May, while Moody’s revised its outlook on the country to Positive in August.

Mr Oyedele added that FTSE Russell returned Nigeria to Frontier Market status with effect from September 21, 2026. He said these decisions together reflect a converging and increasingly favourable view of the country’s reform path.

Fitch said the outlook revision reflects ongoing reform of the policy framework and its increased confidence that the momentum will not be disrupted by the elections due in early 2027.

It said monetary and exchange rate reforms have led to greater naira flexibility, disinflation and faster-than-expected accumulation of foreign exchange reserves.

Gross reserves rose to $54.9 billion on September 25, 2026, from $32 billion in mid-April 2024. Fitch attributed the increase to more formalised foreign exchange transactions, strong portfolio inflows, and higher export receipts and remittances.

The agency said reserve quality has also improved, as the Central Bank of Nigeria (CBN) has reduced its foreign exchange liabilities. It expects reserve cover to reach 6.3 months of current external payments by the end of 2026, though it noted that large net errors and omissions remain a source of uncertainty.

Fitch forecasts that the current account surplus will widen to 6.4 per cent of GDP in 2026 but narrow in 2027, as it expects global oil prices to fall to $70 per barrel from $87 in 2026.

On the elections, it said the incumbents are well positioned to win in early 2027 because the ruling party controls most of the 36 states and the opposition is fragmented. It therefore expects broad continuity in economic policy. It named significant policy slippage, including fiscal loosening, weaker capital inflows and major social instability, as the main risks to that view.