Global credit ratings agency Moody’s has upgraded Nigeria’s sovereign rating to B3 from Caa1, signaling substantial progress in the nation’s external and fiscal positions.
This upgrade reflected a significant improvements in Nigeria’s economy, driven by a more flexible exchange rate and the removal of oil subsidies, which have alleviated budgetary spending pressures.
“The recent overhaul of Nigeria’s foreign exchange management framework has markedly improved the balance of payments and bolstered the Central Bank of Nigeria’s foreign exchange reserves,” Moody’s stated.
The agency also noted that inflationary risks have diminished, with inflation and domestic borrowing costs showing signs of easing, bolstering confidence in the stability of these policy changes.
The stable outlook indicated that Moody’s expects Nigeria’s recent progress on external and fiscal fronts to continue, albeit at a slower pace if oil prices fall.
“The stable outlook reflects our expectations that external and fiscal improvements will decelerate but will not reverse entirely,” Moody’s added.
The upgrade is seen as a positive development for Nigeria’s economy, signaling growing confidence in the country’s economic stability and future outlook.
Minister of Finance Wale Edun welcomed the decision, stating that it reflected growing domestic and international confidence in Nigeria’s ongoing economic reforms.
