Fitch upgrades four Nigerian states’ investment rating

Fitch Ratings has upgraded the Long-Term Foreign- and Local-Currency Issuer Default Ratings of Kaduna, Kogi, Lagos, and Oyo states from ‘B-’ to ‘B.’.

The upgrade reflects improved macroeconomic stableness and caller argumentation reforms successful Nigeria.

The planetary ratings agency, Fitch, announced the improvement connected its website astatine the weekend, noting that the outlook for each 4 states remains stable.

According to Fitch, the standing enactment follows the upgrade of Nigeria’s sovereign recognition standing from ‘B-’ to ‘B’ connected April 11, 2025.

The bureau explained that successful enactment with its standing criteria, the sovereign standing upgrade has been mirrored successful the states, fixed the predominant relation of the national authorities successful Nigeria’s intergovernmental fiscal framework.

“We see the national government’s relation to beryllium predominant successful intergovernmental relations, arsenic it controls the equalisation mechanics enacted done a strategy of transfers to states.

“Therefore, the upgrade of sovereign IDRs is mirrored successful the upgrade of those of Kaduna, Kogi, Lagos, and Oyo, arsenic their Standalone Credit Profiles align with oregon are supra the ratings of Nigeria,” Fitch stated.
The bureau identified respective cardinal drivers down the revised projections for the 4 states, including a steeper depreciation of the naira, expected to transcend N1,500 to the dollar betwixt 2024 and 2028, and a inclination of precocious but gradually declining inflation, which stood astatine 24.23 percent successful March.

It besides noted an summation of implicit 20 percent successful national VAT and oil-related transfers to the states successful 2024, providing captious fiscal support.

In reaction, the politician of Lagos State, Babajide Sanwo-Olu, lauded the caller upgrade of Lagos State’s recognition standing by Fitch Ratings, describing it arsenic a testament to the spot of his administration’s policies and execution.

“This is simply a bully verdict connected our show successful presumption of argumentation decisions and task execution. It is besides a telephone for america to beryllium much active; we volition beryllium successful each sector. I convey Lagosians for their support,” Sanwo-Olu said.