Nigeria's Finance Minister Warns of High Borrowing Costs

Taiwo Oyedele, Nigeria's Minister of Finance, addressed the issue of high borrowing costs due to weak economic data and credit rating concerns at Chatham House in London. He explained that Nigeria's inability to consistently produce credible economic statistics has led international institutions to rely on external sources for assessing its economic performance.

This reliance negatively impacts Nigeria's creditworthiness and increases the cost of borrowing in global capital markets. Oyedele highlighted that Nigeria's position below investment-grade status contributes to these high costs, which in turn limits fiscal space for essential public investments in roads, education, and healthcare.

He pointed out that the absence of official figures, such as the tax-to-GDP ratio, has allowed external estimates to shape perceptions of Nigeria's fiscal performance. Oyedele also expressed skepticism about the immediate impact of the newly established African Credit Rating Agency, suggesting that established firms like S&P Global Ratings, Moody's, and Fitch Ratings would continue to be preferred by international investors until ACRA proves its credibility.