The Federal Government has said a sustained increase in domestic revenue will be critical to Nigeria’s efforts to secure an investment-grade sovereign credit rating.
The government said it would focus on raising revenue, improving the efficiency of public spending and strengthening debt affordability while consolidating gains in the country’s external position.
The statement followed Moody’s Ratings’ decision to revise Nigeria’s sovereign outlook from stable to positive while retaining its B3 rating.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the government’s medium-term objective was to move Nigeria firmly towards investment-grade status.
“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 the government would need to sustain improvements in the external sector while accelerating domestic revenue mobilisation and improving public expenditure management.
Oyedele said the reforms were not being pursued simply to improve Nigeria’s credit rating but to address structural weaknesses that have kept the country’s cost of capital high.
“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.
He said Moody’s positive outlook reflected progress under the government’s macroeconomic and fiscal reform programme, including the removal of the fuel subsidy, foreign exchange reforms and changes to the tax system.
According to him, the measures were strengthening the economy through improvements in external reserves, a more resilient external position, moderating inflation and stronger monetary policy transmission.
The Finance Ministry said its revenue strategy would remain a key component of the reform agenda, alongside fiscal discipline, debt management and a market-driven foreign exchange regime.
It said the government would also continue implementing structural reforms to support non-oil economic growth and strengthen the economy’s capacity to generate revenue.
Moody’s has indicated that further improvement in Nigeria’s external position or a durable increase in government revenue arising from ongoing reforms could support a future rating upgrade.
The government said these areas would therefore remain central to its efforts to improve Nigeria’s creditworthiness, lower borrowing costs and attract more private investment as it works towards investment-grade status.