Nigeria Partners with UNDP, EU, Canada to Boost Sovereign Rating

Nigeria is embarking on a high-level initiative, in partnership with the United Nations Development Programme (UNDP), the European Union (EU), and Canada, to bolster its sovereign credit rating. This collaboration, part of the Africa Credit Ratings Initiative (ACRI), seeks to enhance investor confidence, lower the nation's borrowing costs, and attract crucial development finance.

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Achieving investment grade status was a strategic economic imperative.

The effort involves a Needs Assessment Mission, designed to strengthen Nigeria's institutional coordination, strategic market engagement, and overall preparedness for credit rating assessments. During a debriefing meeting in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, represented by Permanent Secretary (Special Duties) Mohammed Sanusi, stressed the government's objective to secure higher credit ratings that accurately reflect the ongoing reforms and the economy's vast potential.

Achieving an investment grade status is considered a strategic economic imperative. Expert analysis suggests this could reduce borrowing costs by 100 to 150 basis points. Such a reduction is estimated to generate savings of approximately N5.84 trillion annually, resources that could be redirected towards critical development priorities like infrastructure, healthcare, education, and social protection.

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expert analysis suggests that doing so could reduce borrowing costs by 100 to 150 basis points, generating estimated savings of about N5.84 trillion resources that could be redirected to infrastructure, healthcare, education, social protection, and other critical development priorities.

Nigeria aims to overcome the "African Premium," a perception gap that reportedly increases borrowing costs for the continent by over $74.5 billion each year. The focus, however, is not on critiquing the global financial system but on strengthening domestic institutions, improving engagement with international credit rating agencies, and ensuring ratings accurately mirror the economy's resilience and potential. The debriefing meeting included key figures such as the Statistician General of the Federation, Prince Adeyemi Adeniran, and representatives from the UNDP and the EU Delegation.

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for too long, African countries had borne what is often described as the “African Premium”, a perception gap, estimated to cost the continent over $74.5 billion annually in additional borrowing costs.