Global rating agency, Fitch Ratings has warned that Nigeria’s fiscal deficit could widen in 2025–2026 as election-related spending pressures mount.
In its latest review, Fitch reaffirmed Nigeria’s “B” Stable rating but projected the deficit to rise to around 3.1% of GDP, driven by wage increases, campaign projects, and social programmes ahead of the election cycle. The agency noted that such pressures could derail fiscal consolidation and deepen the country’s debt challenges.
Fitch also highlighted Nigeria’s low non-oil revenue and heavy debt-service burden, which continue to strain public finances. Although new tax reforms are expected in January 2026 to raise revenue to 12.4% of GDP by 2027, Fitch remains cautious about their success due to weak administrative capacity.
Data from the Budget Office show Nigeria’s deficit averaged 4–5% of GDP between 2020 and 2024. A renewed rise could push up borrowing costs and crowd out private investment.
In summary, Fitch’s report serves as a critical notice that if political spending remains unchecked as the next elections approach, it could endanger fiscal stability, erode investor confidence, and slow down the country’s economic recovery.
Fitch Sounds Alarm Over Election Spending Risks
