Moody's turns Nigeria's outlook positive while cutting Senegal to Caa2
Moody's affirmed Nigeria's long-term foreign and local currency issuer ratings at B3 and turned the outlook positive, citing a stronger external position, robust current account surpluses and better-than-expected growth. External reserves stood at 53.30 billion dollars on 26 August. The same agency lowered Senegal's ratings to Caa2 from Caa1, saying a power struggle between the executive and the legislature is complicating efforts to handle the debt crisis.
Economics & Markets··Midday
Nigeria's outlook turns positive
Moody's affirmed Nigeria's long-term foreign and local currency issuer ratings at B3 and changed the outlook to positive. The firm cited a stronger external position, robust current account surpluses and better-than-expected growth. External reserves stood at 53.30 billion dollars on 26 August, against 41.22 billion dollars on the same date a year earlier. Moody's puts the current account surplus at 5.1 per cent of gross domestic product in 2025 and expects 6.1 per cent in 2026 and 4.1 per cent in 2027. Inflation fell to 15.4 per cent in July 2026 from 25.3 per cent a year earlier, and 2025 real growth of 4 per cent came in above the roughly 3 per cent the agency had expected.[1]
Senegal's rating drops one notch
Moody's Ratings lowered Senegal's long-term foreign and local currency issuer ratings to Caa2 from Caa1 and kept the outlook negative. The firm said a power struggle between the executive and the legislature is complicating efforts to handle the debt crisis and pushing the country closer to default. The rationale points to rising refinancing pressure, weaker capacity to service debt and the absence of an IMF programme. Gross financing needs are expected to reach about 25 per cent of gross domestic product in 2026, with public debt flat at around 100 per cent through 2028. Interest payments have climbed from 16.1 per cent of government revenue in 2023 to 23.7 per cent.[2]
Fiscal pressure persists in Nigeria
Even with the outlook upgrade, Moody's warned that fiscal pressure remains significant in Nigeria alongside limited revenue-generating capacity and weak debt affordability. The agency expects the current account surplus to reach 6.1 per cent of output in 2026 and 4.1 per cent in 2027. Senegal keeps a negative outlook; Moody's cited executive-legislative friction alongside debt-management pressures and rising gross financing needs.[1], [2]
