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 stability and recent policy reforms in Nigeria.
The outlook for all four states remains stable, following the upgrade of Nigeria’s sovereign credit rating from ‘B-‘ to ‘B’ on April 11, 2025.
Fitch stated that the sovereign rating upgrade has been mirrored in the states due to the predominant role of the federal government in Nigeria’s intergovernmental fiscal framework.
The agency identified key drivers behind the revised projections, including a steeper depreciation of the naira and high but gradually declining inflation.
The states also benefited from an increase of over 20 percent in federal VAT and oil-related transfers in 2024, providing critical financial support.
Lagos State Governor Babajide Sanwo-Olu lauded the upgrade, describing it as a testament to his administration’s policies and execution.