Moody’s revises Nigeria’s outlook to positive, affirms B3 rating

Abdullateef Fowewe

Moody’s Ratings has revised Nigeria’s sovereign credit outlook from stable to positive while affirming the country’s long-term foreign and local currency issuer ratings at B3, citing stronger external buffers and sustained economic reforms.

The Federal Ministry of Finance, in a statement issued in Abuja on Saturday, said the decision announced by Moody’s on August 28 reflected the impact of the Federal Government’s macroeconomic and fiscal reform agenda over the past three years.

According to the ministry, Moody’s attributed the improved outlook to Nigeria’s “markedly stronger external position,” supported by current account surpluses, rising foreign exchange reserves, improved operations in the FX market and better transmission of monetary policy.

The ratings agency projected that Nigeria’s current account surplus would widen to about 6.1 per cent of Gross Domestic Product in 2026, while the country’s gross external reserves rose to $53.30 billion as of August 26, according to Central Bank of Nigeria data.

Moody’s also cited stronger-than-expected growth, noting that Nigeria’s real GDP expanded by 4 per cent in 2025, above an earlier projection of about 3 per cent. It said growth was expected to remain at a similar level through 2027, driven by non-oil activity and improving oil production.

Headline inflation, the ministry added, declined to 15.4 per cent in July 2026 from 25.3 per cent a year earlier.

The development comes days after FTSE Russell confirmed Nigeria’s reclassification from “Unclassified” to “Frontier Market” status on August 27.

It also follows S&P Global Ratings’ upgrade of Nigeria to B from B- in May and Fitch Ratings’ affirmation of the country’s B rating with a stable outlook.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described Moody’s decision as an endorsement of the administration’s reform efforts.

“Moody’s positive outlook is an important external validation of the difficult but necessary reforms this administration has implemented, from removing a costly and inequitable fuel subsidy to unifying the exchange rate, and the landmark tax reforms,” Oyedele said.

He said the reforms were restoring the foundations of macroeconomic stability, including “stronger reserves, a resilient external position, moderating inflation, and more credible policy transmission.”

Oyedele said the government’s medium-term goal was to move Nigeria towards investment-grade status, but stressed that this would require sustained reform implementation.

“Our medium-term ambition is to place Nigeria firmly on the path to investment grade.

“That will require us to sustain the external gains Moody’s has recognised, while making faster progress on domestic revenue mobilisation, spending efficiency, and debt affordability,” he said.

The minister added that the reforms were aimed at lowering Nigeria’s cost of capital, attracting private investment and improving living conditions for citizens.

The ministry said it would continue to prioritise domestic revenue mobilisation, tax administration reforms, fiscal discipline, transparent foreign exchange policies, improved debt management and structural reforms to expand non-oil growth.

It noted that Moody’s indicated that a future rating upgrade could follow if Nigeria sustains its improved external position or records lasting gains in government revenue