Nigeria’s Economic Outlook Receives Positive Boost as Fitch Ratings Upgrades IDR Outlook


London, May 3, 2024: Fitch Ratings announced today a positive revision to Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) Outlook, shifting from Stable to Positive. The agency concurrently affirmed the IDR at ‘B-‘.

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Key Drivers Behind the Revision:


1. Significant Reform: The Positive Outlook is a result of comprehensive reforms undertaken in the past year aimed at restoring macroeconomic stability and bolstering policy coherence and credibility. Notable adjustments include reforms in exchange rate and monetary policies, reduction in fuel subsidies, and enhanced coordination between the Ministry of Finance and the Central Bank of Nigeria (CBN).

2. Reduced Distortions: Implemented reforms have notably reduced distortions stemming from unconventional monetary and exchange rate policies, leading to substantial inflows returning to the official foreign exchange (FX) market. However, challenges such as high inflation and FX market volatility persist, testing the durability of the commitment to reform.

3. Exchange Rate Liberalisation: Efforts by the CBN to reform the monetary and exchange rate framework have resulted in the unification of multiple exchange rate windows and a significant reduction in the differential between official and parallel market rates. Average daily FX turnover at the official FX window has surged, with significant clearance of unpaid FX forwards.

4. Return of Non-Resident Inflows:Formalisation of FX activity and tightening of monetary policy have attracted a surge in foreign portfolio investment inflows, contributing to the appreciation of the naira at the official FX window.

5. **Expected Monetary Policy Tightening:** Fitch anticipates further increases in the CBN monetary policy rate and strengthening of monetary policy transmission, aiming to combat inflation, which rose significantly in March.


1. Improving Fiscal Revenue: While fiscal revenue is on the rise, the budget deficit is expected to widen due to various factors, including underperformance in oil profits.

2. Oil Sector Potential: Anticipated enhancements in oil refining capacity and production levels signal improvements, although challenges such as underinvestment persist.

Sovereign Rating Fundamentals:

Nigeria’s ‘B-‘ IDRs are supported by its large economy, developed domestic debt market, and abundant oil and gas reserves. However, weak governance indicators, high hydrocarbon dependence, and structural weaknesses remain concerns.

Rating Sensitivities:

– Negative actions could result from heightened external liquidity stress or fiscal challenges. Positive actions hinge on reductions in external vulnerabilities and sustained macroeconomic stability.

ESG Considerations:

Nigeria’s governance challenges, reflected in its low World Bank Governance Indicators (WBGI) ranking, negatively impact its credit profile.

The positive revision underscores Nigeria’s ongoing efforts to strengthen its economic fundamentals amidst persistent challenges.

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Godwin Okafor
Godwin Okafor
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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