Moody’s Upgrades Nigeria’s Rating, Stock Market Gains N7.7 Trillion in 5 Months

*Elated Edun targets rapid, sustained, inclusive growth

Kayode Tokede

In a major boost to investor confidence, global ratings agency, Moody’s yesterday, upgraded Nigeria’s credit rating, signaling growing optimism about the country’s economic outlook.

This emerged just as data compiled by THISDAY showed that in a remarkable display of investor confidence and market momentum, the stock market arm of the Nigerian Exchange Limited (NGX) has delivered a staggering N7.7 trillion gain to investors within the first five months of 2025.

The Federal Ministry of Finance welcomed the decision by Moody’s Investors Service to upgrade Nigeria’s Issuer ratings from ‘Caa1 to B3,’ with a stable outlook, citing significant improvements in Nigeria’s external and fiscal positions.

The agency revised Nigeria’s outlook to “stable” from “positive”, as it expects recent progress on external and fiscal fronts to continue, though at a slower pace, if oil prices fall.

The rating agency in a statement yesterday, explained that, “The recent overhaul of Nigeria’s foreign exchange management framework has markedly improved the balance of payments and bolstered the Central Bank of Nigeria’s foreign exchange reserves.”

According to Moody’s, inflationary risks in Nigeria, driven by policy shifts, have diminished. Inflation and domestic borrowing costs are showing nascent signs of easing, bolstering confidence in the stability of these policy changes, it added.

“The stable outlook reflects our expectations that external and fiscal improvements will decelerate but will not reverse entirely,” Moody’s added.
Moody’s Upgrades Nigeria’s Issuer Ratings to ‘B3’, Citing Bold Economic Reforms

Reacting to the development, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun,  said the decision reflected growing domestic and international confidence in Nigeria’s ongoing economic reforms and improvements in the country’s fiscal and external positions under the administration of President Bola Ahmed Tinubu.

He pointed out that it followed a similar upgrade by Fitch Ratings, which recently raised Nigeria’s credit rating from ‘B-’ to ‘B’, with a stable outlook.
“This marks the second positive rating action by Moody’s since the beginning of President Tinubu’s administration, following its previous upgrade from Caa1 Stable to Caa1 Positive in December 2023. “We are encouraged by Moody’s recognition of our reform agenda. This positive outlook reflects our administration’s determination and the tremendous work being carried out across various ministries, departments, and agencies — including our monetary policy authorities at the CBN — to stabilise the economy, attract investment, and ensure inclusive and sustainable growth for all Nigerians,” Edun added.

Since taking office, the Tinubu-led administration has implemented tough but necessary policy measures to tackle long standing economic challenges. These include enhanced revenue mobilization, improved public financial management, and strategic partnerships to unlock infrastructure financing and increase private sector participation.

“The upgrade of Nigeria’s sovereign rating is particularly timely as the government focuses on accelerating rapid, sustained, and inclusive growth, supported by both domestic and foreign private investment. In partnership with Central Bank of Nigeria, the Ministry of Finance remains committed to preserving macroeconomic stability, ensuring debt sustainability, and maintaining sound fiscal management. The government will continue to collaborate with both domestic and international partners to boost investor confidence and enhance Nigeria’s global credit standing,” Edun added.
Meanwhile, buoyed by strong corporate earnings, strategic policy shifts, and renewed foreign interest, the market’s performance signals a bullish outlook and a potential turning point for the broader economy.

Data compiled by THISDAY showed that the overall market capitalisation of listed equities, which closed the month of May 2025 at N70.46 trillion, which was a N7.7 trillion or 12.3 per cent gain, compared with the N62.763 trillion it closed for trading at the end of 2024.

Breakdown by market capitalisation revealed that the stock market in January 2025, appreciated by N1.95 trillion, attributable to cautious trading by investors in some companies quoted on the Exchange.

Also, in February 2025, the market capitalisation appreciated by N2.48 trillion to close at N67.193 trillion.

However, in March 2025, the stock market was down by N936 billion as investors shifted attention to money market instruments.

But it gained N239.03 billion in April 2025 from the N66.257 trillion it opened for trading to close at N66.496 trillion.

Also, the NGX All-Share Index, which measures the performance of listed stocks, crossed the 110,000 basis points mark to close May 2025 at 111,742.01 basis points, about 8,815.61 basis points or 8.56 per cent increase when compared to 102,926.40 basis points the stock market opened for trading this year.
In the five months under review, Nigeria’s inflation showed signs of easing, currently at 23.71 per cent amid a rebasing exercise conducted by the National Bureau of Statistics (NBS) as Gross Domestic Product (GDP) growth projections were revised upward by key stakeholders.

So far this year, the Central Bank of Nigeria (CBN) has continued its monetary tightening policy in its bid to stabilise the naira and inflation.
Under Dr. Olayemi Cardoso of the CBN, Nigeria economy has seen gradual clearance of the foreign exchange backlogs and has restored stability into the foreign exchange market as he had reassured both local and foreign investors from day he resumed duty.

Listed corporate earnings on NGX also played a pivotal role with major fundamental companies declaring impressive earnings.

Capital market analysts noted that sustaining this momentum in the remaining of 2025, would depend on the continuation of stable and credible economic policies.

The MD/CEO, Globalview Capital Limited, Aruna Kebira, in a chat with THISDAY, said the stock market showed a resilient and generally positive performance during the first five months of 2025, despite some volatility and economic headwinds.

He listed banking sector recapitalisation,  corporate earnings, inflation moderation (early q1, investor confidence and increased transaction volume as the major drivers of the stock market in the first five months of 2025.

On expectation for June 2025, he said the outlook for the Nigerian stock market in was cautiously optimistic, with several factors including continued impact of reforms, banking sector momentum, half-year earnings season, regulatory reforms and fixed income market stability:

On his overall assessment for June 2025, he explained: “While the Nigerian stock market has demonstrated significant resilience and recorded impressive gains in the first five months of 2025, June is likely to see a continuation of this positive momentum, albeit with potential for some volatility.

“Investors will be closely watching for further policy pronouncements, macroeconomic data (especially inflation and exchange rate trends), and corporate earnings releases.

“The banking sector is expected to remain a key driver, alongside interest in companies that can navigate the current economic climate effectively. Investors should remain selective and focus on fundamentally strong companies.”

Also, the Vice  President,  Highcap Securities, Mr.  David Adonri, pointed out that the Nigerian stock market experienced renewed momentum in the first five months of 2025, driven by a combination of strong corporate earnings, attractive dividend declarations, and improving macroeconomic fundamentals.
According to Adonri, these factors significantly boosted investor confidence, translating into broad-based gains across the market.

He noted that the more stable foreign exchange environment supported activity in the consumer goods sector, which saw heightened buying interest and a rebound in valuations.

On the stock market performance for the remaining part of  Q2 2025,  he explained that,  “The market is entering Q2 2025 with hope and optimism as major enterprises have started recovering from the damage inflicted on their balance sheets due to floating of the Naira.
“Banks are also expected to post higher unprecedented profits in Q2. These can elevate equities in Q2 2025.”