Nigeria is far from achieving investment grade status – experts
Lagos, Oct. 2026 – Nigeria is far from achieving investment grade status essential for attracting desired foreign investments.
This is the consensus of the two main panelists at the just concluded DataPro International Rating Webinar.
The panelists are Prof.Tortsten Schmidt, the Head of Macroeconomics and Public Finance Research at RWI-Essen, and Prof. kai Gehring, an Associate Professor of Economics at University of St. Gallen (HSG).
Schmidt said investment grade status is quite different from sovereign rating and advised that the two should not be mixed up.
Investment grade status is a credit quality rating assigned to bonds or debt issuers that signals a low risk of default and a strong capacity to repay financial obligations, while sovereign rating is an independent evaluation of a country’s creditworthiness that measures its ability and willingness to repay its commercial debt obligations on time.
He said Nigeria still needed between four to six notches to be in position to achieve investment grade status.
The expert advised the country to work and improve on its socio-macroeconomic environment and develop its public institutions.
He said Nigeria’s Gross Domestic Product (GDP) growth rate of less than four percent was too small for the country to attain investment grade status, attract foreign investors and desired investments,
Schmidt said Nigeria would require more than 10 per cent annual gdp growth rate to achieve its objective of achieving investment grade status.
He also said Nigeria’s tax-gdp ratio of 13.5% was also inadequate and urged the government to broaden its tax base.
He said the country’s public institutions were generally weak and advised that these institution must be upgraded and be rule-based.
Prof Gehring also said Nigeria has between six to seven notches to reach investment grade status, urging the country to hone its public institutions as well as investment and productive resources.
He advised the federal government to continue with its current economic reforms, stressing that the reforms had already put Nigeria on the path of achieving the investment grade status.
“The reforms are a good start, I wish Nigeria can continue in the line of the reforms,” he said.
Gehring advised that the country must improve on its ability and willingness to repay debts.
He urged the government to block all the loopholes in revenue collection, while channeling available resources to investments and more productive ventures.
Gethering expressed regret that much of the loans taken by the Nigerian government were not used for intended purposes, but often diverted.
He called for more transparency in the collection and management of available financial resources.
The expert urged the government to try and change the narratives on the general insecurity across the country, although individual investors might have their biases.
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