Moody's Upgrades Nigeria's Outlook to Positive Amid Growth

Moody's has upgraded Nigeria's sovereign outlook to "positive" from "stable," attributing this change to stronger foreign exchange reserves and better-than-expected economic growth, which enhance the country's ability to withstand external shocks. Despite this positive outlook, Moody's affirmed Nigeria's long-term foreign-currency rating at B3, reflecting ongoing fiscal pressures due to limited revenue-generating capacity and weak debt affordability.

The agency noted that Nigeria's external position has improved, with higher reserves and a better current account balance providing greater protection against potential shocks. This outlook change follows assessments by major international rating agencies evaluating Nigeria's economic reforms.

In April, Fitch Ratings affirmed Nigeria's rating at B with a stable outlook, highlighting improvements from the government's economic policy direction since mid-2023. The International Monetary Fund has urged Nigeria to deepen reforms across various sectors to support macroeconomic stability and inclusive growth.

Nigeria's economy recorded a real GDP growth of 3.89% year-on-year in Q1 2023, according to the National Bureau of Statistics.