Moody’s Positive Outlook Proves Subsidy Removal, FX Unification, Tax Reforms Success—Oyedele

The federal government has welcomed the ratings upgrade by Moody’s saying it reflects the tangible impact of its macroeconomic and fiscal reform agenda over the past three years.

Moody’s Ratings’ revised Nigeria’s sovereign credit outlook from stable to positive, while affirming the country’s long-term foreign and local currency issuer ratings at B3.

The federal government in its reaction to the development, said the action, announced on Friday, reflected the tangible impact of the federal government’s macroeconomic and fiscal reform agenda over the past three years.

Commenting, the minister of finance and coordinating minister of the economy, Taiwo Oyedele, in a statement said: “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.”

“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 Ministry reaffirms its commitment to the reform priorities that underpin the country’s improving credit profile, including: Deepening domestic revenue mobilisation through ongoing tax reform and administration improvements; Sustaining disciplined, market-reflective, and transparent foreign exchange regime; Strengthening public debt management and improving debt affordability metrics;

Maintaining fiscal discipline in coordination with the subnational governments; and

Advancing structural reforms to support non-oil growth and diversify government revenue.

The Ministry noted Moody’s guidance 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, both of which remain central pillars of the administration’s economic strategy.

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 noted that Nigeria’s current account surplus is projected to widen to about 6.1 per cent of GDP in 2026, while gross external reserves have risen substantially over the past year, a build-up corroborated by Central Bank of Nigeria data showing reserves climbing to $53.30 billion as of August 26, 2026.

The agency 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, and similar expansion anticipated through 2027, supported by non-oil sector activity and rising oil output. Headline inflation has continued to ease, falling to 15.4 per cent in July 2026 from 25.3 per cent a year earlier.

The rating action follows FTSE Russell’s confirmation on August 27, 2026 of Nigeria’s reclassification from “Unclassified” to “Frontier Market” status, and comes on the heels of S&P Global Ratings’ upgrade of Nigeria to B from B- in May 2026, and Fitch’s affirmation of Nigeria at B with a stable outlook. Taken together, these actions reflect a converging and increasingly favourable assessment of Nigeria’s reform trajectory among the major international rating agencies.