Moody’s Upgrades Nigeria’s Rating to B3, Cites Improved Reserves

Moody’s has upgraded Nigeria’s rating by a notch to ‘B3’ from ‘Caa1,’ citing significant improvements in the country’s external and fiscal positions.

The credit ratings agency revised Nigeria’s outlook to ‘stable’ from “positive’ as it expects recent progress on external and fiscal fronts to continue, though at a slower pace, if oil prices fall.

“The recent overhaul of Nigeria’s foreign exchange management framework … has markedly improved the balance of payments and bolstered the CBN’s (Central Bank of Nigeria) foreign exchange reserves,” Moody’s said in a statement seen on Saturday.

The rating agency said the stable outlook reflects “our expectations that external and fiscal improvements will decelerate but will not reverse entirely.”

Moody’s also noted that inflationary risks in Nigeria, driven by policy shifts, have diminished. Inflation and domestic borrowing costs are showing nascent signs of easing, bolstering confidence in the stability of these policy changes.

The World Bank had said that Nigeria’s economy achieved its fastest growth in about a decade in 2024, driven by a strong fourth quarter and an improved fiscal position.

However, it warned that persistently high inflation remains a challenge.