Moody’s Upgrades Nigeria’s Outlook to Positive, Maintains B3 Rating

Moody’s Ratings has revised Nigeria’s credit outlook from stable to positive while maintaining the country’s B3 long-term foreign and local currency issuer ratings. The global credit rating agency announced the change in a rating action released on Friday, citing improvements in Nigeria’s external position and stronger-than-expected economic growth.

The positive outlook reflects Nigeria’s sizeable current account surpluses, increased foreign exchange reserves, improved functioning of the foreign exchange market, and more effective monetary policy transmission. Moody’s noted that if these improvements are sustained, Nigeria’s capacity to absorb external shocks and strengthen economic resilience could gradually improve. The agency also expects gradually higher oil production to support economic growth in 2026 and 2027.

According to Moody’s, Nigeria’s external position has strengthened significantly over the past year. The current account surplus exceeded previous expectations and is forecast to widen to about 6.1 percent of GDP in 2026 before narrowing to 4.1 percent in 2027. Gross foreign exchange reserves, excluding gold, Special Drawing Rights, and the International Monetary Fund position, rose to about $31.2 billion a year earlier, covering approximately six months of imports.

On economic growth, Moody’s reported that Nigeria’s real GDP growth reached four percent in 2025, an improvement from its previous assessment of around three percent. The agency expects growth to remain around four percent in the coming years, supported by continued strength in the non-oil economy and gradually higher oil production. Headline inflation declined to 15.4 percent in July 2026 from 25.3 percent a year earlier, partly due to the fading effects of price adjustments following exchange rate liberalization and fuel subsidy removal, as well as the Central Bank of Nigeria’s restrictive monetary policy stance.

Despite the positive outlook, Moody’s affirmed Nigeria’s B3 ratings, highlighting persistent fiscal pressures due to limited revenue-generation capacity and weak debt affordability, despite a moderate debt burden. The rating firm noted that general government revenue stood at around 10 percent of GDP in 2025, among the lowest globally.

The positive outlook follows earlier upgrades in June 2025, when Moody’s raised Nigeria’s long-term issuer ratings to B3 from Caa1 and changed the outlook to stable from positive. In May 2026, S&P Global Ratings upgraded Nigeria’s long-term foreign- and local-currency sovereign credit ratings to ‘B’ from ‘B-’, with a stable outlook, citing three years of structural reforms, higher oil production and refining capacity, and a stronger balance of payments.

Moody’s indicated that the latest positive outlook could eventually lead to an upgrade if Nigeria sustains recent improvements in its external position, strengthens external resilience, and reduces vulnerability to external shocks. Additional revenue measures that boost confidence in sustained growth in government revenue could also support an upgrade. However, the outlook could revert to stable if Nigeria’s external buffers deteriorate, external imbalances return, or economic growth weakens materially.

#NigeriaCreditRating #Moody’sRatings #B3Rating #EconomicOutlook #ForeignReserves #OilProduction #EconomicGrowth #NigeriaEconomy