Ratings agency Moody's has cut Nigeria's long-term foreign-currency bond to B1 from Ba3 and kept its outlook stable, saying Nigerian efforts to broaden non-oil revenue had been unsuccessful.
The latest B2 rating is equivalent to Nigeria's existing B/Stable Outlook rating from S&P and slightly lower than Nigeria's B+/Negative Outlook rating from Fitch.
But the Federal Government has disagreed with Moody's downgrading rating in a statement.
A response by the Ministry of Finance (FMF), Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) indicated that since Nigeria was last rated by Moody's (as B1 stable) in December 2016, the country has successfully emerged from a protracted recession and recorded important improvements across a broad range of indices.
"While we respect the right of Moody's to make this decision, we strongly disagree with the premise and must address some of the conclusion upon which the decision rests," the response stated.
The Federal Government drew the attention of Moody's to Nigeria's return to economic growth of 0.55 per cent in Q2 2017, and returning business confidence, as evidenced by a PMI index of 55.0.
The nation's fiscal and monetary authorities also noted that the country now has a stable foreign exchange window for importers and exporters, with improving liquidity and convergence of the parallel and official rates.
The stability in foreign exchange market led to improved foreign exchange reserves, now totalling $34 billion.