Lagos, Nigeria – Fitch Ratings has elevated the Long-Term Foreign and Local-Currency Issuer Default Ratings (IDRs) of Lagos, Kaduna, Kogi, and Oyo states from ‘B-’ to ‘B’.
This upgrade demonstrates growing investor confidence, particularly in Lagos, where Governor Babajide Sanwo-Olu’s T.H.E.M.E.S Plus Agenda has driven economic progress.
Moreover, this development aligns with Nigeria’s sovereign rating upgrade from ‘B-’ to ‘B’ on April 11, 2025, reflecting stronger macroeconomic stability.
Fitch emphasized that federal fiscal policies significantly influence state ratings, hence the synchronized improvement. Consequently, this signals a positive shift in Nigeria’s subnational economic outlook.
Governor Sanwo-Olu welcomed the upgrade, thanking Lagosians for their unwavering support.
He affirmed, “This validates our policy decisions and project execution, but we must remain proactive across all sectors.”
Additionally, he reiterated his administration’s commitment to sustaining growth through strategic investments.
Notably, Lagos faces currency risk, with 50% of its direct debt in foreign currencies as of 2023. However, Fitch projects its payback ratio will stay robust at five times by 2028.
This resilience stems from Lagos’s exceptional Internally Generated Revenue (IGR), which contributes 75% of its operating revenue—triple the national average.
Furthermore, Lagos is set to achieve a budget surplus in 2024, underscoring its fiscal strength.
The state’s high IGR ensures consistent debt servicing, making it a standout performer nationally.
As a result, the upgrade enhances Lagos’s appeal to both local and foreign investors.
Meanwhile, Governor Sanwo-Olu’s recent dialogue with Harvard students showcased Lagos’s investment potential, amplifying its global visibility.
Experts now view the state as a prime destination for infrastructure and technology investments.
Looking ahead, Fitch’s stable outlook for Lagos, Kaduna, Kogi, and Oyo signals sustained economic momentum.
Analysts predict these states will attract more capital inflows, further stimulating regional development.
In Kaduna, the upgrade reflects improved fiscal management under Governor Uba Sani’s administration. Similarly, Kogi and Oyo have demonstrated better revenue mobilization, earning investor trust. Collectively, these advancements highlight Nigeria’s evolving subnational economic landscape.
Ultimately, Fitch’s decision reinforces confidence in Nigeria’s subnational economies.
With Lagos leading the charge, these states are poised to drive broader national growth.
Investors now have stronger incentives to engage with these emerging markets.
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