In a significant development for Nigeria's economy, Moody's Ratings has upgraded the country’s credit outlook from stable to positive while affirming its B3 long-term foreign and local currency issuer ratings. This change, announced on Friday, reflects notable improvements in Nigeria’s external financial position and stronger-than-expected economic growth.

Moody’s noted that the positive outlook indicates an enhanced capacity for Nigeria to withstand external shocks and improve its economic resilience. The agency highlighted several factors contributing to this assessment, including sizeable current account surpluses, increased foreign exchange reserves, and improved functioning of the foreign exchange market. These improvements have been complemented by more effective monetary policy transmission, which has helped stabilize the economy.

The credit rating agency projected that Nigeria's current account surplus would widen to approximately 6.1% of Gross Domestic Product (GDP) in 2026, before narrowing to 4.1% in 2027. This marks a significant increase from previous expectations, showcasing the country’s strengthened external position over the past year. Additionally, Nigeria's gross foreign exchange reserves, excluding gold and other international positions, have risen to about $31.2 billion, sufficient to cover around six months of imports.

Moody’s also reported that Nigeria’s real GDP growth reached 4% in 2025, surpassing earlier forecasts that suggested medium-term growth would remain closer to 3%. The agency anticipates that this growth will continue, supported by a robust non-oil economy and gradually increasing oil production. Furthermore, headline inflation has decreased to 15.4% in July 2026, down from 25.3% a year earlier, attributed to the diminishing effects of previous price adjustments and the Central Bank of Nigeria's restrictive monetary policy stance.

Despite these positive indicators, Moody's affirmed Nigeria's B3 rating, indicating ongoing fiscal pressures due to limited revenue-generating capacity and weak debt affordability. The agency pointed out that general government revenue was around 10% of GDP in 2025, one of the lowest rates globally. The positive outlook follows earlier upgrades in June 2025 when Moody’s raised Nigeria’s long-term issuer ratings from Caa1 to B3 and shifted the outlook from positive to stable.

In May 2026, S&P Global Ratings also upgraded Nigeria's long-term foreign and local currency sovereign credit ratings to ‘B’ from ‘B-’, citing structural reforms and improvements in oil production and refining capacity. Moody’s suggested that the current positive outlook could lead to an upgrade if Nigeria maintains its recent improvements and implements additional revenue measures that bolster confidence in sustained government revenue growth. However, the agency cautioned that the outlook could revert to stable if Nigeria's external buffers deteriorate or economic growth weakens significantly.