FG: Revenue growth crucial to Nigeria’s investment upgrade

Nigeria says it must raise domestic revenue steadily if it wants to move toward an investment-grade sovereign credit rating, making revenue mobilisation a central test of its economic reform programme.

Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele said the government would also focus on public spending efficiency, debt affordability and improvements in the country’s external position. “Our medium-term ambition is to place Nigeria firmly on the path to investment grade,” he said in a statement issued by the Federal Ministry of Finance.

The government’s position followed Moody’s decision to change Nigeria’s sovereign outlook from stable to positive while keeping its B3 rating. Oyedele said the outlook reflected progress under the administration’s macroeconomic and fiscal reforms, including the removal of the fuel subsidy, foreign exchange reforms and changes to the tax system.

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Our medium-term ambition is to place Nigeria firmly on the path to investment grade.

He said those measures had contributed to stronger external reserves, a more resilient external position, moderating inflation and improved monetary policy transmission. But he stressed that the government was not pursuing reform simply to win a better rating. “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.

The Finance Ministry said revenue growth would remain part of a wider agenda involving fiscal discipline, debt management and a market-driven foreign exchange regime. It also said structural reforms would continue to support non-oil economic growth and strengthen the state’s ability to generate revenue. Moody’s has indicated that further improvement in Nigeria’s external position or a lasting increase in government revenue could support a future upgrade.

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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.