FG Partners Canada, UNDP,  EU, Others to Strengthen Nigeria’s Sovereign Rating

• Oyedele: Achieving investment grade status can save Nigeria N5.84tn

•Says Africa loses over $74.5bn annually in additional borrowing costs due to perception gaps

Ndubuisi Francis in Abuja

The federal government has concluded a high-level lNeeds Assessment Mission of Nigeria , in collaboration with the United Nations Development Programme (UNDP) under the Africa Credit Ratings Initiative (ACRI) and strategic partners, including the European Union Delegation to Nigeria and ECOWAS,  as well as Canada,.

The initiative  is designed to instil investor confidence, shore up Njgeria’s sovereign rating, drive down borrowing costs and attract the much-needed development finance.

Speaking in Abuja during a debriefing meeting after a three-day high-level Credit Ratings Needs Assessment Mission of Nigeria by the partners, as part of broader efforts to strengthen the country’s institutional co-ordination, strategic market engagement, and sovereign credit ratings preparedness, the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, expressed  the federal government’s quest to secure higher credit ratings, and ensure that Nigeria’s credit profile accurately reflects the progress of ongoing reforms, and the vast opportunities within the economy.

The meeting was designed to reflect on preliminary findings from the Sovereign Credit Ratings Needs Assessment Mission, validate priority reform messages, and agree next  steps towards the sovereign credit ratings roadmap for Nigeria.

Oyedele, who was represented by the Permanent Secretary (Special Duties), Ministry of Finance, Mohammed Sanusi,

noted that while securing higher credit ratings, and ensuring that Nigeria’s credit profile accurately reflects the progress of ongoing reforms and the vast opportunities within the economy, achieving investment grade status was a strategic economic imperative

According to him, 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.

The minister observed that 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.

But he noted that Nigeria’s current focus was not on the shortcomings of the global financial architecture, but on strengthening its institutions, improving engagement with international credit rating agencies, and ensuring that its sovereign ratings accurately reflect the resilience and potential of the economy.

The debriefing meeting had in attendance, the Statistician General of the Federation, Prince Adeyemi Adeniran; Chief Economist, Africa Bureau, UNDP,  Raymond Gilpin; Head of Cooperation, European Union Delegation to Nigeria and ECOWAS, Massimo De Luca; Counsellor and Head of Development Cooperation, High Commission of Canada, Arash Irantalab,  and the Special Adviser to the President on Economy, Dr. Tope Fasua, among others.

Oyedele expressed government’s sincere appreciation to the UNDP for its Sovereign Credit Ratings Initiative and for bringing together a distinguished team of global experts to support African countries in strengthening their sovereign creditworthiness and improving access to sustainable finance.

“We are gathered here at a critical moment in Nigeria’s economic journey, and I commend the UNDP for partnering with us to develop a sustainable and forward-looking Sovereign Credit Rating Roadmap for our country. Your presence here today reflects our shared commitment to ensuring that sovereign credit ratings become a catalyst for development rather than a constraint to growth.

“Allow me to also express the sincere appreciation to the European Union Delegation to Nigeria and ECOWAS for their steadfast partnership and continued support in advancing Nigeria’s public finance and sustainable development agenda.

“The European Union has been a trusted partner throughout Nigeria’s Integrated National Financing Framework journey, accompanying us from the design stage to this important phase of strengthening sovereign creditworthiness.

“This partnership underscores our shared commitment to enhancing Nigeria’s investment attractiveness, reducing the cost of capital, and mobilizing sustainable financing for national development.I also wish to acknowledge and appreciate the Government of Canada for its participation in this important engagement and for its support towards Nigeria’s efforts to strengthen its sovereign credit profile. Canada’s presence, alongside other development partners, reflects growing international confidence in Nigeria’s reform agenda and our collective commitment to building stronger institutions that support sustainable economic growth,” the minister said.

He recalled that over the past three years, the federal government has implemented one of the most ambitious economic reform programmes in Nigeria’s history, adding that these reforms were already yielding positive results.

According to him, recent rating actions by Moody’s, Fitch Ratings, and S&P Global Ratings, together with the favourable assessment of Nigeria’s reform programme during the recent IMF Article IV Consultation underscored growing confidence in the economy.

“Nevertheless, sovereign credit ratings are influenced not only by macroeconomic performance but also by the quality of data, institutional coordination, policy credibility, effective communication, and sustained engagement with rating agencies. This is precisely why today’s meeting is so important.

“We welcome the UNDP’s support in strengthening institutional capacity, improving data quality, enhancing inter-agency coordination, and deepening engagement with international credit rating agencies.

“Government remains committed to ensuring that all relevant institutions work together to present a coherent, evidence-based narrative of Nigeria’s economy, supported by accurate, timely, and credible data. We also look forward to drawing lessons from countries such as the Philippines and Vietnam, whose coordinated reforms and sustained engagement significantly improved their sovereign ratings,” he said.

In his remarks, the UNDP Chief Economist for Africa, Mr. Raymond Gilpin, stated that  the decline in development assistance has negatively impacted access to affordable financing for African countries.

Official Development Assistance (ODA), he said, has sharply devlined over the past two decades, while many African countries had graduated to middle-income status, thereby reducing their access to concessional funding even as their financing needs continue to rise.

Gilpin said, “Traditional development assistance is declining, and many countries now rely more on the capital market to finance development. At the same time, financing the Sustainable Development Goals and the African Union’s Agenda 2063 has become increasingly difficult.”

According to him, govetnments across the continent now face the difficult choice of allocating scarce resources either to debt servicing or to investments in infrastructure, poverty reduction and technology, adding that sovereign credit ratings is a key determinant of development financing as they shape investors’ perception of risk.

“Credit ratings determine how global investors assess the risks of investing in developing countries. Improving those ratings is therefore essential to attracting affordable capital and unlocking long-term development financing,” he said.

Gulpin said the Africa Credit Ratings Initiative was established by the UNDP in partnership with the African Development Bank (AfDB), United Nations Economic Commission for Africa (UNECA), Africa Centre for Economic Transformation (ACET) and the African Peer Review Mechanism (APRM) to address the challenge.

The initiative helps African governments strengthen engagement with international rating agencies, improve data quality and build institutional capacity, he said.

As part of the programme, the UNDP recently sponsored 22 senior officials from 11 African countries to study how the Philippines successfully moved from non-investment grade to investment grade.

Gilpin expressed confidence that Nigeria’s ongoing reforms, coupled with recent improvements in its sovereign ratings, have placed the country on the path towards attaining investment-grade status, which would significantly enhance investor confidence and lower borrowing costs.

The Canadian High Commissioner to Nigeria, Mr. Pasquale Salvaggio, reaffirmed Canada’s commitment to strengthening economic ties with Nigeria, adding that Canada’s non-oil trade with Nigeria had risen by 50 per cent, making Nigeria Canada’s second-largest trading partner in Africa.

The envoy assured that Canada would also partner with Nigerians in the diaspora to raise investments in Nigeria’s economy.