Moody's Outlook Upgrade
Moody’s Investors Service changed Nigeria’s sovereign outlook from stable to positive on 29 August 2026 and reaffirmed the country’s B3 long‑term foreign‑currency and local‑currency issuer ratings. The outlook revision is attributed to a markedly stronger external position and economic growth that exceeded Moody’s prior expectations.
External Position Improvements
Gross foreign‑exchange reserves, excluding gold, Special Drawing Rights and the IMF position, increased to approximately $44.4 billion in June 2026, up from $31.2 billion in June 2025. This accumulation of reserves underpins the positive outlook shift.
Current‑Account Surplus
Nigeria recorded a current‑account surplus equal to 5.1 % of GDP in 2025. Moody’s projects the surplus to expand to 6.1 % of GDP in 2026 before moderating to 4.1 % of GDP in 2027.
Economic Growth and Inflation
Real GDP growth reached 4.0 % in 2025, higher than Moody’s earlier medium‑term estimate of around 3 %. Headline inflation fell to 15.4 % in July 2026, down from 25.3 % a year earlier, reflecting the Central Bank of Nigeria’s restrictive monetary stance, governance reforms, and a shift toward an inflation‑targeting framework that has improved policy transmission.
Fiscal Context and Rating Rationale
The B3 rating affirmation acknowledges ongoing fiscal pressures: general‑government revenue was about 10 % of GDP in 2025, among the lowest globally, limiting fiscal space. Despite a moderate debt‑to‑GDP ratio, interest‑payment obligations continue to consume a substantial share of revenue.
Outlook Conditions
Moody’s notes that a further rating upgrade is possible if the external buffers remain robust and if sustained revenue‑raising measures raise the fiscal position. Conversely, the outlook could revert to stable should external reserves erode significantly or if economic growth weakens materially.