Nigeria: Moody’s upgrades rating, confidence restored

Good news for Nigeria as Moody’s has upgraded its sovereign rating from Caa1 to B3, marking an improvement in the perceived risk of the Nigerian economy. The country remains in the risky credit category, but the upgrade is a strong signal of confidence.

The rating agency hails the recent reforms undertaken by the government of Bola Tinubu: two devaluations of the naira and a reduction in energy subsidies. As a result, the balance of payments has recovered, foreign exchange reserves have increased, and inflation – still high – is starting to slow.

This comes after two years of cost-of-living crisis, marked by soaring prices. But according to the World Bank, the Nigerian economy is now experiencing its strongest growth acceleration in a decade, with +4.5% in 2024, and a forecast of +3.6% for 2025.

The improved credit rating should translate into lower interest rates on government borrowing, relieving pressure on Nigerian debt. A breath of fresh air for the country’s finances, still dependent on declining oil revenues.

This upturn reflects macroeconomic stabilization, but remains fragile. Further fiscal and monetary reforms will be essential to maintain this momentum and win back investor confidence in the long term.

source: africapresse.com