Moody's upgrades Nigeria's credit outlook to positive, affirms B3 rating

Global credit rating agency Moody's has elevated Nigeria's credit outlook to positive from stable, while reaffirming the country's B3 long-term issuer ratings. This significant upgrade signals growing confidence in Nigeria's economic trajectory and its capacity to withstand external pressures.

The positive outlook is primarily attributed to notable improvements in Nigeria's external position and economic growth that has surpassed expectations. Moody's highlighted that sustained progress in these areas could enhance the nation's resilience to external shocks and bolster its economic stability. The agency noted that sizeable current account surpluses, increased foreign exchange reserves, improved foreign exchange market functioning, and more effective monetary policy transmission have been key drivers of this positive assessment.

“

The change in outlook to positive from stable reflects improvements in Nigeria’s external position and stronger-than-expected economic growth, which, if sustained, would enhance the country’s capacity to absorb external shocks, strengthen economic resilience and, over time, support a gradual increase in government revenue.

Moody's projects that Nigeria's current account surplus will widen to approximately 6.1 percent of GDP in 2026, before settling at 4.1 percent in 2027. Furthermore, the agency anticipates that real GDP growth will hover around four percent in the coming years, supported by a robust non-oil economy and a gradual increase in oil production. This growth forecast represents an upward revision from Moody's previous assessment, which anticipated medium-term growth closer to three percent.

The agency also observed a significant strengthening of Nigeria's external position over the past year. Gross foreign exchange reserves, excluding gold and other assets, rose to about $31.2 billion a year prior, now covering roughly six months of imports. Moody's stated that the combination of substantial current account surpluses and reserve accumulation, if maintained, would considerably reduce Nigeria's external vulnerability.

“

Taken together, the large current account surpluses and the reserve accumulation, if maintained, would materially reduce Nigeria’s external vulnerability.