LAGOS, Aug 29 – Moody’s ratings has revised Nigeria’s sovereign outlook to “positive” from “stable”, citing stronger foreign exchange reserves and better-than-expected economic growth that have improved the country’s capacity to withstand external shocks.
The ratings agency maintained Nigeria’s sovereign rating at “B3”, indicating that significant fiscal constraints remain despite improvements in the country’s external position and economic performance.
Nigeria, Africa’s third-largest economy and a major oil producer, has benefited from higher crude prices linked to the conflict in the Middle East, alongside increased exports of refined petroleum products. These developments have supported the country’s current account and contributed to the accumulation of foreign exchange reserves.
Moody’s said it expects Nigeria’s current account surplus “to remain sizeable even under materially lower oil prices”, suggesting that the country’s external position could remain relatively resilient even if the recent strength in crude prices fades.
Economic growth is also providing support to the improved outlook. The World Bank has projected Nigeria’s economy to expand by about 4.2% in 2026, with stronger oil revenues, fiscal discipline and tight monetary policy expected to contribute to greater macroeconomic stability and help contain inflation.
The positive outlook, however, does not remove the structural constraints weighing on Nigeria’s credit profile. Moody’s maintained the B3 rating because of continued fiscal pressures arising from the government’s limited capacity to generate revenue and weak debt affordability, despite what it described as a moderate overall debt burden.
Nigeria’s recent improvement in external buffers has nevertheless coincided with a broader reassessment by international ratings agencies. S&P Global Ratings upgraded Nigeria’s sovereign rating to “B” from “B-” in May, citing continued structural reforms and improving creditworthiness. Fitch Ratings also affirmed Nigeria’s rating at “B” in April, retaining a stable outlook.
The differing outlooks among the major ratings agencies reflect both the progress made in Nigeria’s macroeconomic adjustment and the challenges that remain. Stronger reserves and economic growth provide greater protection against external shocks, while fiscal weakness, revenue mobilisation and debt-servicing capacity remain central to the country’s medium-term credit assessment.
