A bond credit rating company, Moody’s Ratings has announced the upgrading of Nigeria’s credit rating from Caa1 to B3 on Saturday, May 31, 2025.
Moody’s, in a comprehensive report issued on Saturday, pointed out that Nigeria’s credit rating improved because of a boost in the country’s external reserves and enhanced fiscal management.
The rating agency also revised Nigeria’s outlook to “stable” from “positive,” indicating expectations of sustained, albeit slower, progress if oil prices decline.
The agency said the upgrade to B3, though still below investment grade, represents a milestone for Nigeria, which has faced economic headwinds in recent years, including currency volatility and inflationary pressures.
“The recent overhaul of Nigeria’s foreign exchange management framework … has markedly improved the balance of payments and bolstered the CBN’s (Central Bank of Nigeria) foreign exchange reserves,” Moody’s said in a statement seen on Saturday.
Moody’s also explained that Nigeria’s credit rating improved because of some reforms implemented by the administration of President Bola Ahmed Tinubu, including the removal of fuel subsidies and the adoption of a more flexible exchange rate.
The agency added that these measures have alleviated budgetary pressures and reduced the country’s reliance on costly subsidies, freeing up fiscal space for critical investments.
Moody’s Nigeria’s credit rating upgrade follows a similar upgrade by Fitch Ratings in April 2025, which raised Nigeria’s rating to ‘B’ with a stable outlook, reinforcing the positive trajectory of the nation’s economic policies.
However, Moody’s cautioned that Nigeria’s B3 rating could face downward pressure if external shocks, such as a sharp decline in oil prices or policy reversals due to political or social pressures, derail the current progress.
