The federal government has welcomed Moody’s Ratings’ decision to revise Nigeria’s outlook from stable to positive while retaining the country’s long-term foreign- and local-currency ratings at B3.
The decision, announced by Moody’s on Friday, means the agency does not consider Nigeria’s current credit rating to have deteriorated and sees conditions that could support an upgrade if the country’s economic reforms continue to deliver results.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said in a statement yesterday that the decision reflected the impact of economic reforms implemented by the federal government over the past three years.
A positive outlook generally signals that a rating upgrade could be considered within the medium term if the factors underpinning the improved assessment are sustained.
For Nigeria, an improved sovereign credit rating could eventually reduce the cost of accessing international financing and strengthen investor confidence, although the immediate impact of an outlook revision is different from that of an actual rating upgrade.
Moody’s attributed the improved outlook to Nigeria’s stronger external position, citing large current account surpluses, rising foreign exchange reserves, improvements in the foreign exchange market and a more effective monetary policy framework.
