The Global ratings agency, Fitch Ratings, has affirmed Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B’, with a stable outlook, describing it as both ‘high and declining’.
The country’s new economic status was reviewed in a report published on Friday.
According to the report, “Nigeria’s ‘B’ rating is supported by its large economy, a relatively developed and liquid domestic debt market, large oil and gas reserves, and an improved monetary and exchange rate policy framework”.
It, however, added that the rating is constrained by weak governance indicators, high hydrocarbon dependence, high inflation, security challenges, and structurally very low, although improving, non-oil revenue.
“We project inflation to fall from an average of 33% in 2024, to 21% in 2025 (though the lack of historical CPI data prevents a reliable assessment of inflation) and to 17% in 2027, still far above the projected ‘B’ median of 5% in 2027”, it stated.
The report said government external debt service is moderate but expected to rise to USD5.2 billion in 2025 (with USD3.1 billion of amortisations, including a USD1.1 billion Eurobond repayment due in November 2025), from USD4.6 billion in 2024, and fall to USD3.4 billion in 2026, before rising to USD5 billion in 2027.
“We project external debt service/current external receipts to average 15% over 2025-2027, below the ‘B’ median of 19%.
“We forecast that real GDP growth will rise to 4.2% in 2025, from 4.1% in 2024. The relative stability in the FX market will support non-oil activity (about 96% of GDP), though high inflation and interest rates will constrain momentum.
