Moody’s Moves Nigeria Outlook To Positive, Keeps B3 Rating

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

The agency pointed to stronger external buffers, current account surpluses and better growth prospects. The Guardian reported that Moody’s expects growth to stay around four per cent over the next few years, supported by the non-oil economy and rising oil production.

The positive outlook does not mean Nigeria’s debt risks have disappeared. Moody’s kept the B3 rating and cited fiscal weaknesses that still weigh on the country’s credit profile. Guardian’s report also noted concerns around public finances, while Punch reported that analysts saw the outlook change as a boost to investor confidence.

The move came shortly after FTSE Russell confirmed Nigeria’s return to its frontier market classification. Punch reported that the Nigerian Exchange gained on Friday, with market capitalisation up by N1.38tn, or 0.9 per cent, to N155.826tn.

For the government, the decision gives fresh outside support for its economic reform argument. For investors, it is still a cautious signal: the outlook improved, but the rating itself did not.

Sources: The Guardian, Punch