Fitch Ratings has cautioned that Nigeria’s bid to stabilise its economy could face major headwinds if the government fails to achieve its fiscal deficit reduction targets.
The global credit rating agency noted that a larger-than-anticipated budget deficit in 2025 may trigger further depreciation of the naira, exacerbate inflationary pressures, and elevate borrowing costs. Such developments, Fitch said, could undermine the government’s ambitious reform agenda.
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In its latest review, Fitch assessed Nigeria’s 2025–2027 Medium-Term Expenditure Framework (MTEF), which forecasts a significant narrowing of the budget deficit. However, the agency expressed scepticism about the framework’s underlying assumptions, including an oil price benchmark of $75 per barrel and production levels of 2.06 million barrels per day, condensates included.
Fitch’s analysis underscores the delicate balancing act required to steer Africa’s largest economy towards stability amid persistent fiscal challenges.
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