Lagos, Nigeria – May 5, 2024 – The global rating agency Fitch revised the country’s outlook to positive from stable in a sign of growing confidence in Nigeria’s economic trajectory. This upgrade follows a series of bold reforms implemented by President Bola Tinubu over the past year.
Tinubu’s economic agenda has tackled head-on some of Nigeria’s longstanding challenges. Costly subsidies on petrol and electricity were slashed, while the naira currency underwent a devaluation to address the gap between official and black-market exchange rates.
“These reforms have helped to correct distortions created by unconventional monetary and exchange rate policies in the past,” Fitch stated in a press release.
This positive outlook from Fitch follows similar revisions by Moody’s and S&P last year, highlighting the international community’s growing optimism about the potential of Nigeria’s reform efforts.
Nigeria has faced significant economic hurdles in recent years, including sluggish growth, a scarcity of US dollars, a growing national debt, and widespread security concerns.
However, Fitch acknowledges that significant challenges remain in the short term. Inflation continues to be a major concern, and the currency market has yet to fully stabilize. The Central Bank has responded by aggressively raising interest rates and requiring banks to hold more capital, aiming to curb inflation and strengthen the financial system.
Despite the positive outlook, Fitch maintained Nigeria’s credit rating at “B-“, which falls within the “junk” category. This indicates that while the country is on the right track, there is still work to be done to achieve a more stable and secure economic future.
