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Nigeria's States Upgraded Amid Rising Currency Risks

4/28/2025

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Summary

Story summary

Fitch Ratings upgraded Kaduna, Kogi, Lagos, and Oyo states in Nigeria from ‘B-’ to ‘B’ with stable outlooks.
The upgrade reflects Nigeria's sovereign improvement but highlights rising currency risks, especially for Kaduna.
Lagos enjoys high internally generated revenue, while Oyo's local currency debt offers some protection.
All states face fiscal challenges due to dependence on oil revenues and external debt, threatening long-term sustainability.

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Story summary

Fitch Ratings upgraded Kaduna, Kogi, Lagos, and Oyo states in Nigeria from ‘B-’ to ‘B’ with stable outlooks.
The upgrade reflects Nigeria's sovereign improvement but highlights rising currency risks, especially for Kaduna.
Lagos enjoys high internally generated revenue, while Oyo's local currency debt offers some protection.
All states face fiscal challenges due to dependence on oil revenues and external debt, threatening long-term sustainability.