Lagos State has received a significant boost to its economic standing, as Fitch Ratings has upgraded its credit ratings from ‘B-’ to ‘B’.
EpeInsights learnt that this upgrade, which also extends to Kaduna, Kogi, and Oyo states, comes as part of a broader move by the international credit agency to reflect improved macroeconomic conditions in Nigeria.
The upgraded Long-Term Foreign and Local-Currency Issuer Default Ratings (IDRs) for these states have been mirrored after the recent upgrade of Nigeria’s sovereign rating from ‘B-’ to ‘B’ on April 11, 2025.
Fitch’s upgrade highlights the impact of the federal government’s fiscal policies, with the agency noting that Nigeria’s central role in intergovernmental relations led to the positive shift for the four states.
This upgrade is seen as a testament to the strength and resilience of Governor Babajide Sanwo-Olu’s administration, specifically his T.H.E.M.E.S Plus Agenda, a comprehensive six-pillar economic plan that has been pivotal to the state’s recovery and growth.
Sanwo-Olu’s commitment to fiscal responsibility and development was underscored in his recent remarks to a group of Harvard students, where he highlighted the vast investment potential in Lagos.
Fitch’s report emphasizes the fiscal resilience of Lagos, noting that the state’s internally generated revenue (IGR) is a major contributor to its operating performance.
With IGR making up 75% of Lagos’s total operating revenue—far exceeding the national average of 25%, Lagos is projected to maintain a strong payback ratio and a budget surplus in 2024.
This economic vitality sets the state apart, positioning it as an outlier in Nigeria’s fiscal landscape.
Despite some exposure to foreign currency debt, with 50% of Lagos State’s direct debt denominated in foreign currencies by the end of 2023, Fitch remains confident in the state’s ability to meet its financial obligations, projecting a robust repayment capacity over the next several years.
Governor Sanwo-Olu, in a statement following the rating upgrade, expressed gratitude to the people of Lagos for their ongoing support. “This is a good verdict on our performance, in terms of policy decisions and project execution,” he said.
“It is also a call for us to be more active; we will be in every sector. I thank Lagosians for their support.”
The stable outlook for Lagos and the three other states reflects improved fiscal health and confidence in their economic governance, offering a favorable environment for future investments.
