Moody’s revises Nigeria’s outlook to positive, keeps B3 rating
By Aboki Forex —
Moody’s Ratings has changed Nigeria’s credit outlook from stable to positive while retaining the country’s long-term foreign and local currency ratings at B3. The decision, announced on Friday, August 28, 2026, signals that an upgrade could be considered in the medium term if economic reforms keep delivering results.
The Federal Government welcomed the move. The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said in a statement on Saturday that it reflected the impact of reforms implemented over the past three years.
Why Moody’s changed the outlook
Moody’s attributed the improved outlook to Nigeria’s stronger external position. It cited large current account surpluses, rising foreign exchange reserves, improvements in the foreign exchange market and a more effective monetary policy framework.
The agency projected that Nigeria’s current account surplus could reach about 6.1 per cent of GDP in 2026. It also noted the significant increase in external reserves. Central Bank of Nigeria figures put reserves at $53.30 billion as of August 26, 2026.
Moody’s also noted stronger-than-expected economic growth. Real GDP grew 4 per cent in 2025, above its earlier projection of about 3 per cent. The agency expects growth to remain around that level through 2027, supported by non-oil activity and increased oil production.
Inflation declined to 15.4 per cent in July 2026 from 25.3 per cent a year earlier, according to figures cited in the assessment.
Recent rating actions
The Moody’s decision follows other developments in Nigeria’s financial markets. On August 27, 2026, FTSE Russell moved Nigeria from “Unclassified” to “Frontier Market” status. In May, S&P Global Ratings upgraded Nigeria from B- to B, while Fitch Ratings maintained the country’s B rating with a stable outlook.
Oyedele said the positive outlook is external validation of the administration’s reforms. He said, “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. These decisions are restoring the fundamentals of macroeconomic stability: stronger reserves, a resilient external position, moderating inflation, and more credible policy transmission.”
He added that the bigger goal is to push Nigeria into “investment grade” status. “Our medium-term ambition is to place Nigeria firmly on the path to investment grade,” he said.
According to the Minister, “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. We are committed to doing the work required to get there, not for the rating itself, but because the underlying reforms are what will lower Nigeria’s cost of capital, crowd in private investment, and deliver shared prosperity for Nigerians.”
What it means for Nigeria
An improved sovereign credit rating could eventually reduce the cost of accessing international financing and strengthen investor confidence. The Ministry of Finance says it will continue reforms on tax administration, foreign exchange transparency, debt management, state financial discipline and non-oil growth.
Moody’s has indicated that Nigeria’s rating could be raised again if the country sustains its improved external position, or if revenue reforms permanently increase government collections. Both remain key targets of the administration’s economic plan.