{"id":117298,"date":"2025-04-12T18:49:27","date_gmt":"2025-04-12T17:49:27","guid":{"rendered":"https:\/\/pointblanknews.com\/pbn\/?p=117298"},"modified":"2025-04-12T18:49:27","modified_gmt":"2025-04-12T17:49:27","slug":"nigerias-economic-stability-improves-inflation-still-major-concern-fitch","status":"publish","type":"post","link":"https:\/\/pointblanknews.com\/pbn\/news\/nigerias-economic-stability-improves-inflation-still-major-concern-fitch\/","title":{"rendered":"Nigeria\u2019s Economic Stability Improves, Inflation Still Major Concern \u2013 Fitch"},"content":{"rendered":"<div id=\"m#msg-f:1829200291285377039\" class=\"mail-message expanded\">\n<div class=\"mail-message-header spacer\" style=\"text-align: justify;\">Daniel Adaji<\/div>\n<div id=\"m#msg-f:1829200291285377039-content\" class=\"mail-message-content collapsible zoom-normal mail-show-images \" style=\"text-align: justify;\">\n<div class=\"clear\">\n<div><\/div>\n<div>Fitch Ratings has revised Nigeria\u2019s credit outlook from Negative to Stable, citing a growing sense of confidence in the economic direction pursued by the Tinubu administration.<\/div>\n<div><\/div>\n<div>The move reflects the agency\u2019s recognition of substantial policy shifts that are beginning to yield positive results, though inflation remains a pressing issue.<\/div>\n<div><\/div>\n<div>Despite maintaining the country\u2019s long-term foreign currency rating at \u2018B\u2019, Fitch noted that key reforms implemented since mid-2023\u2014such as liberalising the exchange rate, ending fuel subsidies, tightening monetary policy, and halting deficit monetisation\u2014have strengthened Nigeria\u2019s economic fundamentals.<\/div>\n<div><\/div>\n<div>\u201cWe are seeing clear signs of increased commitment to market-based reforms under President Tinubu\u2019s administration. While challenges remain, Nigeria\u2019s trajectory has shifted toward stability and greater investor confidence,\u201d Fitch stated.<\/div>\n<div><\/div>\n<div>A central component of this shift was the Central Bank of Nigeria\u2019s (CBN) rollout of a new foreign exchange (FX) matching platform and FX code in 2024.<\/div>\n<div><\/div>\n<div>These changes were designed to improve transparency in price discovery and contributed to narrowing the gap between official and parallel FX market rates following a sharp 40 per cent depreciation of the naira last year.<\/div>\n<div><\/div>\n<div>Consequently, Nigeria recorded an 89 per cent surge in FX inflows through both official and autonomous sources in the last quarter of 2024, up significantly from an 8 per cent rise the previous year.<\/div>\n<div><\/div>\n<div>However, Fitch projects a slight weakening of the naira in the near term, particularly in light of external challenges.<\/div>\n<div><\/div>\n<div>One such threat is the recently imposed 14 per cent tariff on Nigerian exports by the United States.<\/div>\n<div><\/div>\n<div>Business groups, including the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), have warned the tariff could significantly affect FX inflows and increase volatility.<\/div>\n<div><\/div>\n<div>JPMorgan has also cautioned that the tariff, along with declining global oil prices, might undermine recent gains in exchange rate stability.<\/div>\n<div><\/div>\n<div>While Nigeria\u2019s macroeconomic indicators have improved, inflation remains a stubborn concern.<\/div>\n<div><\/div>\n<div>The inflation rate, though moderated to 23.2 per cent in February 2025 following a rebasing of the Consumer Price Index, still stands far above the median for countries with a similar rating, which is 4.3 per cent.<\/div>\n<div><\/div>\n<div>To rein in inflation, the CBN has implemented a sharp monetary tightening cycle, raising interest rates by a cumulative 875 basis points since February 2024. The current policy rate stands at 27.5 per cent.<\/div>\n<div><\/div>\n<div>\u201cMonetary stability is critical to maintaining the gains from ongoing reforms,\u201d the agency stated.<\/div>\n<div><\/div>\n<div>Inflation is expected to average 22 per cent in 2025 and decline slightly to 20 per cent in 2026.<\/div>\n<div><\/div>\n<div>Nigeria\u2019s external reserves have also seen some improvement, reaching $41bn by the end of 2024 before easing to $38bn due to external debt servicing, including a $1.1bn Eurobond payment due in November.<\/div>\n<div><\/div>\n<div>The current account posted a $6.8bn surplus in 2024, thanks to reduced import costs and stronger FX formalisation efforts.<\/div>\n<div><\/div>\n<div>On governance, Fitch raised concerns over institutional weakness and policy implementation, pointing to Nigeria\u2019s ranking in the 19th percentile of the World Bank Governance Indicators. Issues such as corruption and regulatory inefficiencies continue to weigh on the country\u2019s credit outlook.<\/div>\n<div><\/div>\n<div>While Nigeria\u2019s macroeconomic picture is stabilising, the road ahead remains bumpy. The country must maintain reform momentum while tackling inflation and improving governance if it is to fully consolidate recent economic gains.<\/div>\n<div id=\"m_7785707904494897608ymail_android_signature\"><\/div>\n<\/div>\n<\/div>\n<div class=\"mail-message-footer spacer collapsible\" style=\"text-align: justify;\"><\/div>\n<\/div>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content --><!-- AddThis Related Posts generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Daniel Adaji Fitch Ratings has revised Nigeria\u2019s credit outlook from Negative to Stable, citing a growing sense of confidence in the economic direction pursued by the Tinubu administration. The move&hellip;<!-- AddThis Advanced Settings generic via filter on wp_trim_excerpt --><!-- AddThis Share Buttons generic via filter on wp_trim_excerpt --><!-- AddThis Related Posts generic via filter on wp_trim_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":117299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-117298","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Nigeria\u2019s Economic Stability Improves, Inflation Still Major Concern \u2013 Fitch - Pointblank News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/pointblanknews.com\/pbn\/news\/nigerias-economic-stability-improves-inflation-still-major-concern-fitch\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nigeria\u2019s Economic Stability Improves, Inflation Still Major Concern \u2013 Fitch - Pointblank News\" \/>\n<meta property=\"og:description\" content=\"Daniel Adaji Fitch Ratings has revised Nigeria\u2019s credit outlook from Negative to Stable, citing a growing sense of confidence in the economic direction pursued by the Tinubu administration. 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