Fitch Ratings has upgraded the Long-Term Foreign- and Local-Currency Issuer Default Ratings for the Nigerian states of Kaduna, Kogi, Lagos, and Oyo from ‘B-’ to ‘B.’
The upgrade reflects Nigeria’s improved macroeconomic stability and the impact of recent policy reforms.
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The global ratings agency announced the update on its website over the weekend, stating that the outlook for all four states remains stable.
Fitch noted that the move follows its recent upgrade of Nigeria’s sovereign credit rating from ‘B-’ to ‘B’ on April 11, 2025.
According to the agency, the states’ ratings were adjusted in line with its criteria, which link subnational ratings to the sovereign rating, reflecting the central government’s dominant role in Nigeria’s intergovernmental fiscal system.
“Therefore, the upgrade of sovereign IDRs is mirrored in the upgrade of those of Kaduna, Kogi, Lagos, and Oyo, as their Standalone Credit Profiles align with or are above the ratings of Nigeria,” Fitch stated.
The agency cited several key factors behind its revised projections for the four states, including a sharper depreciation of the naira, expected to surpass N1,500 per dollar between 2024 and 2028, and persistently high, though gradually easing, inflation, which was recorded at 24.23 percent in March.
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Fitch also highlighted a more than 20 percent increase in federal VAT and oil-related transfers to the states in 2024, offering essential financial support.
Reacting to the development, Lagos State Governor Babajide Sanwo-Olu praised Fitch Ratings’ upgrade of the state’s credit rating, calling it a strong endorsement of his administration’s policies and their effective implementation.
This is a good verdict on our performance in terms of policy decisions and project execution. It is also a call for us to be more active; we will be in every sector. I thank Lagosians for their support, Sanwo-Olu said.
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