Fitch Bets on Nigeria’s Resilience as JP Morgan Sounds Alarms
In a vote of confidence for Africa’s largest economy, Fitch Ratings has upgraded Nigeria’s long-term foreign-currency rating to ‘B’ from ‘B-‘ with a Stable Outlook, citing the country’s ongoing energy sector reforms as a key factor in maintaining current account surpluses.
“We anticipate a continued reduction in external vulnerabilities through further easing of domestic FC supply constraints, while renewed energy sector reforms should help sustain current account surpluses,” Fitch noted in its latest sovereign rating release.
While Fitch forecasts Nigeria’s current account surplus to shrink from 6.6% of GDP in 2024 to an average of 3.3% in 2025-2026, this optimistic outlook contrasts sharply with JP Morgan’s recent warning that falling oil prices and new US tariffs could push Nigeria’s current account into deficit territory if oil prices remain below the country’s $60 per barrel fiscal breakeven.
Despite these mixed signals, Fitch maintains that Nigeria’s improved macro policy mix, progress on foreign exchange liberalization, and energy sector reforms provide a supportive foundation for external stability—provided reform momentum continues and global market conditions remain relatively stable.
Source: nairametrics.com
