Moody's upgrades Nigeria's rating to 'B3' on improved external 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.

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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.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.