FG Faults International Credit Ratings over Borrowing Costs

The Federal Government has faulted international credit rating agencies for failing to adequately reflect improvements in Nigeria’s economic fundamentals and reform performance, arguing that such assessments contribute to the high cost of borrowing faced by the country and other African economies.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, raised the concern during a bilateral meeting with the President of the African Development Bank, Sidi Ould Tah, on the sidelines of the 2026 International Monetary Fund and World Bank Group Annual Meetings in Bangkok, Thailand.

According to a statement issued on Tuesday by the Head of Media at the Federal Ministry of Finance, Efe Ovuakporie, Oyedele maintained that international credit ratings sometimes fail to capture improvements in countries implementing economic reforms, resulting in higher financing costs.

The statement partly read, “Oyedele said international credit ratings do not always reflect improvements in economic fundamentals and reform performance, which raises financing costs for countries such as Nigeria.”

The minister’s position comes amid concerns over the borrowing costs faced by African governments in international capital markets, where sovereign credit ratings influence investors’ assessment of default risks and the interest rates demanded on government debt.

Responding to the concern, Ould Tah disclosed that the AfDB was developing a mechanism to support African governments in their engagements with international credit rating agencies.

The statement added, “The facility will help countries present credible economic data and challenge assessments where necessary.”

The proposed initiative is expected to provide technical and analytical assistance to African countries seeking to improve the quality of information presented to rating agencies and address assessments they consider inconsistent with their economic performance.

Beyond the credit rating concerns, Nigeria and the AfDB agreed to undertake a joint technical review of the bank’s existing portfolio in the country to improve project implementation and strengthen development financing.

The ministry added, “The portfolio review will identify implementation bottlenecks, speed up project delivery and align ongoing operations with the Federal Government’s development priorities.”

Oyedele also reaffirmed Nigeria’s commitment to maintaining its position as the bank’s largest shareholder and meeting its capital subscription obligations.

He stressed that Nigeria’s longstanding relationship with the continental development finance institution should translate into increased financing and measurable economic benefits.

The statement added, “He said the long relationship between Nigeria and the Bank should now deliver more development finance and practical economic gains.”

The minister further expressed Nigeria’s support for the AfDB’s Four Cardinal Points agenda under Ould Tah’s leadership, describing its priorities as consistent with the Federal Government’s development objectives.

The agenda focuses on bridging Africa’s financing gap, strengthening the continent’s financial sovereignty, harnessing its demographic dividend and developing resilient infrastructure through the local processing of natural resources.

Both officials also discussed opportunities to deepen African financial integration, expand local currency transactions and strengthen trade insurance and credit enhancement mechanisms.

These measures are intended to reduce investment risks, improve access to financing and encourage greater private capital participation in African economies.

The discussions also highlighted the importance of retaining skilled professionals within Africa to support economic transformation and institutional development.

Meanwhile, the two parties agreed to begin preparations for an official visit to Nigeria by the AfDB President.

The proposed visit is expected to include meetings with President Bola Tinubu, senior government officials and other stakeholders to discuss Nigeria’s development priorities and strengthen cooperation with the bank.

The ministry said technical engagements on financing arrangements and portfolio performance would continue alongside preparations for the visit.