SAT AUG 29 2026-theGBJournal| Nigeria’s Finance Minister Taiwo Oyedele said Saturday Moody’s decision to revise the country’s sovereign credit outlook to positive validates the government’s economic reforms, while warning that sustained progress on revenue mobilisation, spending efficiency and debt affordability will be needed to achieve an investment-grade rating.
Moody’s Ratings on Friday, August 28, 2026, revised Nigeria’s sovereign credit outlook from stable to positive while affirming its long-term foreign and local currency issuer ratings at B3, citing stronger external buffers and sustained reform momentum.
The Federal Ministry of Finance welcomed the decision, saying the action reflected the tangible impact of the Federal Government’s macroeconomic and fiscal reform agenda over the past three years.
For Oyedele, however, the significance of the Moody’s action extends beyond the rating itself.
He said the improvements identified by the agency — including stronger reserves, a more resilient external position, moderating inflation and improved monetary policy transmission — point to changes in the underlying fundamentals of the economy.
“Moody’s positive outlook is an important external validation of the difficult but necessary reforms this administration has implemented, from removing a costly and inequitable fuel subsidy to unifying the exchange rate, and the landmark tax reforms.
These decisions are restoring the fundamentals of macroeconomic stability: stronger reserves, a resilient external position, moderating inflation, and more credible policy transmission.”
Moody’s attributed the improved outlook to a markedly stronger external position, underpinned by sizeable current account surpluses, rising foreign exchange reserves, improved functioning of the foreign exchange market, and more effective transmission of monetary policy.
The agency projected that Nigeria’s current account surplus would widen to about 6.1 per cent of GDP in 2026, while gross external reserves have risen substantially over the past year.
Central Bank of Nigeria data showed reserves climbing to $53.30 billion as of August 26, 2026.
Moody’s also pointed to stronger-than-expected economic performance, with real GDP growth reaching 4 per cent in 2025, against earlier projections of about 3 per cent.
Similar expansion is anticipated through 2027, supported by non-oil sector activity and rising oil output.
Headline inflation has also continued to ease, falling to 15.4 per cent in July 2026 from 25.3 per cent a year earlier.
The Moody’s action follows FTSE Russell’s confirmation on August 27, 2026, of Nigeria’s reclassification from “Unclassified” to “Frontier Market” status.
It also comes after S&P Global Ratings upgraded Nigeria to B from B- in May 2026, while Fitch affirmed Nigeria at B with a stable outlook.
Taken together, the decisions point to a converging assessment among major international ratings and market institutions that Nigeria’s economic reforms are beginning to strengthen its macroeconomic position.
Oyedele said the government’s longer-term objective was to build on those gains and move Nigeria towards investment-grade status, but stressed that this would depend on further improvements in the domestic side of the economy.
“Our medium-term ambition is to place Nigeria firmly on the path to investment grade. That will require us to sustain the external gains Moody’s has recognised, while making faster progress on domestic revenue mobilisation, spending efficiency, and debt affordability.
We are committed to doing the work required to get there, not for the rating itself, but because the underlying reforms are what will lower Nigeria’s cost of capital, crowd in private investment, and deliver shared prosperity for Nigerians.”
The Finance Ministry said it would continue to focus on the reforms underpinning the country’s improving credit profile.
These include deepening domestic revenue mobilisation through ongoing tax reform and improvements in tax administration; sustaining a disciplined, market-reflective and transparent foreign exchange regime; strengthening public debt management and improving debt affordability metrics; maintaining fiscal discipline in coordination with subnational governments; and advancing structural reforms to support non-oil growth and diversify government revenue.
Moody’s has indicated that a further rating upgrade could follow if the recent improvement in Nigeria’s external position is sustained, or if revenue reforms succeed in durably increasing government receipts.
Those areas are therefore likely to remain central to the government’s economic strategy as it seeks to translate stronger external buffers and improving macroeconomic indicators into lower borrowing costs, greater private-sector investment and stronger economic growth.
For Oyedele, the positive outlook is therefore less a destination than a measure of whether the reforms are beginning to deliver durable improvements in Nigeria’s economic fundamentals.
By Charles IKE-OKOH
X-@theGBJournal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
