Moody’s Ratings has upgraded Nigeria’s long-term foreign and local currency issuer ratings from Caa1 to B3, citing reforms by the Central Bank of Nigeria (CBN) as a major driver. The outlook was also revised from positive to stable, marking a significant improvement in investor perception.
The rating agency, in a statement published on its website Friday, commended the CBN’s decision to scrap the multiple exchange rate regime in favour of a unified, market-driven forex system. This, Moody’s said, has enhanced transparency, improved foreign exchange liquidity, and narrowed the gap between official and parallel market rates.
The reforms have also led to increased investor confidence and strengthened Nigeria’s capacity to meet external debt obligations.
However, despite the upgrade, Moody’s warned that Nigeria’s economic outlook remains fragile. The agency highlighted two key threats: a decline in global oil prices and the persistence of inflation, both of which could strain Nigeria’s foreign reserves and undermine the central bank’s ability to stabilize the naira without resorting to excessive intervention.
“These risks could challenge the resilience of the current monetary framework and reverse some of the macroeconomic gains achieved,” the report noted.
As the country continues its efforts to stabilize the economy, Moody’s call for caution signals that while progress has been made, maintaining momentum will depend heavily on global conditions and domestic policy discipline.
