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Moody’s has revised Nigeria’s sovereign outlook to “positive” from “stable”, citing stronger foreign exchange reserves and better-than-expected economic growth as factors improving the country’s ability to withstand external shocks.
Reuters reported on Friday that the ratings agency, however, affirmed Nigeria’s long-term foreign-currency rating at B3, reflecting continued fiscal pressures from the country’s limited revenue-generating capacity and weak debt affordability.
Moody’s said Nigeria’s external position has strengthened, with higher reserves and an improved current account balance providing greater protection against potential shocks.
What the report is saying
Moody’s assessment points to stronger external buffers and improved economic performance as key reasons for the change in outlook.
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- The agency expects Nigeria’s current account surplus to remain sizeable even if oil prices fall materially.
- Higher crude oil prices linked to the Middle East conflict have supported Nigeria’s external position.
- Increased exports of refined petroleum products have also contributed to the country’s current account surplus.
- Moody’s said the improved position gives Nigeria greater capacity to absorb external shocks.
The positive outlook signals that Nigeria’s credit profile could improve if the gains in external resilience and economic performance are sustained.
Get up to speed
Nigeria’s latest outlook change follows a series of assessments by major international rating agencies as they evaluate the impact of the country’s economic reforms.
- The World Bank has maintained its 4.4 per cent growth forecast for Nigeria in 2027.
- S&P Global Ratings upgraded Nigeria’s sovereign rating to B from B- in May, citing sustained structural reforms and improving creditworthiness.
Fitch Ratings, in April, also affirmed Nigeria’s rating at B with a stable outlook after previously upgrading the outlook from negative.
Fitch had highlighted improvements stemming from the government’s economic policy direction since mid-2023.
During the week, Nairametrics reported that the International Monetary Fund (IMF) called on Nigeria and other major African economies to deepen reforms across fiscal policy, monetary and financial sectors, and governance to strengthen macroeconomic stability and support more inclusive growth.
What you should know
Nairametrics earlier reported that Nigeria’s economy recorded a real Gross Domestic Product (GDP) growth of 3.89% year-on-year in the first quarter of 202, according to the latest report from the National Bureau of Statistics (NBS).
- Nigeria’s foreign exchange reserves rose above $53 billion for the first time in more than 17 years, reaching $53.11 billion as of August 24, 2026.
- Nairametrics earlier reported that Nigeria’s external reserves have grown by $7.09 billion since the beginning of 2026.
- The latest position has now surpassed the CBN’s projected reserve level of approximately $51.04 billion for the whole of 2026.
Earlier, the Nigerian Economic Summit Group (NESG) projected that escalating geopolitical tensions in the Middle East could deliver a massive oil revenue windfall to Nigeria, potentially reaching as high as N30.2 trillion if the conflict between Iran and Israel becomes prolonged.
Nairametrics previously reported that security, economic, and policy analysts said the ongoing Iran–Israel–US conflict has exposed significant weaknesses in Nigeria’s ability to anticipate, absorb, and respond to external shocks, warning that the country’s crisis-response “toolkits” are no longer adequate for today’s increasingly interconnected global risks.
