Revenue drive key to Nigeria’s investment-grade ambition — FG

THE Federal Government says stronger domestic revenue mobilisation will be critical to moving Nigeria towards an investment-grade sovereign credit rating following Moody’s Ratings’ decision to revise its outlook on the country to positive.

The government said the upgrade in outlook from stable to positive, while retaining Nigeria’s B3 rating, reflects the progress made under its macroeconomic and fiscal reform programme.

Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, said Nigeria must build on the improvements in its external position while significantly strengthening revenue generation and the efficiency of government spending.

“Our medium-term ambition is to place Nigeria firmly on the path to investment grade,” Oyedele said in a statement issued by the Federal Ministry of Finance on Saturday.

He said achieving the objective would require sustained improvements in Nigeria’s external position, faster domestic revenue mobilisation, more efficient public spending and improved debt affordability.

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According to him, the government’s focus is not merely on securing a better credit score but on implementing reforms that can reduce the cost of borrowing and attract more private capital into the economy.

“We are committed to doing the work required to get there, not for the rating itself, but because the underlying reforms are what will lower Nigeria’s cost of capital, crowd in private investment, and deliver shared prosperity for Nigerians,” he said.

Oyedele said Moody’s positive outlook provided external validation of the reforms implemented by the administration, including the removal of the fuel subsidy, exchange-rate reforms and changes to the tax system.

He said the measures were beginning to strengthen Nigeria’s macroeconomic fundamentals through improved external reserves, a more resilient external position, moderating inflation and stronger monetary policy transmission.

The finance ministry said it would maintain its focus on expanding domestic revenue, sustaining a market-driven foreign exchange regime, strengthening debt management and fiscal discipline, and implementing structural reforms capable of supporting non-oil economic growth.

The government’s revenue strategy could become particularly important to future rating decisions, as Moody’s indicated that sustained improvements in Nigeria’s external position or a durable increase in government revenue from ongoing reforms could support an eventual upgrade.

The Federal Government said these areas would therefore remain central to its economic policy as it seeks to improve Nigeria’s creditworthiness and move towards investment-grade status.