Moody’s Upgrades Nigeria’s Rating on Better External, Fiscal Positions

BREAKING NEWSJune 2, 2025 at 10:28 AM UTC

TLDR

Moody’s Investors Service has upgraded Nigeria’s sovereign credit rating by one notch from “Caa1” to “B3”, citing significant improvements in the country’s external balance and fiscal position
The agency also revised the outlook to “stable” from “positive”, signaling confidence in the durability of recent economic reforms
The upgrade follows a World Bank assessment earlier this month, which noted that Nigeria recorded its fastest annual GDP growth in a decade in 2024

Moody’s Investors Service has upgraded Nigeria’s sovereign credit rating by one notch from “Caa1” to “B3”, citing significant improvements in the country’s external balance and fiscal position. The agency also revised the outlook to “stable” from “positive”, signaling confidence in the durability of recent economic reforms.

The upgrade follows a World Bank assessment earlier this month, which noted that Nigeria recorded its fastest annual GDP growth in a decade in 2024, driven by a strong fourth quarter and improved public finances. However, the World Bank also cautioned that high inflation remains a concern.

Moody’s highlighted that Nigeria’s recent overhaul of its foreign exchange management framework has notably strengthened its balance of payments and boosted the Central Bank of Nigeria’s foreign reserves. It also noted early signs of easing inflation and lower borrowing costs, suggesting growing investor confidence in Nigeria’s reform trajectory.

Daba is Africa's leading investment platform for private and public markets. Download here

Key Takeaways

The upgrade to B3 marks a critical turning point for Nigeria’s credit profile, placing it a step closer to re-entering the broader pool of emerging markets considered investable by institutional debt investors. It reflects tangible progress made through exchange rate reforms, fiscal tightening, and efforts to rebuild external buffers. Moody’s noted that while inflationary pressures remain, they are beginning to ease. The “stable” outlook assumes that these gains will slow but not reverse, especially if oil prices decline—a key risk for Africa’s largest economy. With Nigeria’s government pursuing foreign reserve accumulation, debt restructuring, and broader macroeconomic stabilization, the upgrade could help reduce external borrowing costs and improve market access. However, sustaining momentum will require continued policy discipline, especially amid global volatility and domestic inflationary headwinds.

Nigeria

Economy

Fiscal

Moody's

Moody’s Investors Service

Credit Rating

Sovereign Credit Rating