Experts at the sixth DataPro International Credit Rating Webinar highlighted the critical challenge of ensuring that economic policies, implemented to stabilize the economy, survive potential political changes. The concern is that reforms, even if beneficial for macroeconomic stability, may not translate into improved living standards for the majority of the population, creating a political vulnerability.
Professor Kai Gehring of the University of Bern emphasized that the key for Nigeria is not introducing reforms but maintaining them over time, drawing parallels with countries that achieve investment-grade sovereign ratings through policy persistence. He noted that Nigeria is still several rating notches away from investment-grade status, with improvements in security, revenue mobilization, and transparency being crucial for creditworthiness.
Concerns about policy reversal were echoed by investors who seek assurances that measures supporting debt repayment and economic stability will remain in place beyond the current administration. The International Monetary Fund and the World Bank have acknowledged Nigeria's macroeconomic improvements but also pointed to persistent poverty and food insecurity, underscoring the disconnect between national economic indicators and household well-being.
Discussions also focused on the need for institutional development, including stronger revenue collection, education, and transparent public administration, as identified by Professor Torsten Schmidt of the University of Duisburg-Essen. The founder of DataPro Limited, Abimbola Adeseyoju, stressed that credit ratings are vital catalysts for economic transformation, influencing investment and borrowing costs, and called for consistent policy implementation and robust market infrastructure.
The social cost of reforms is evident in the concerns raised by organized labor and manufacturers regarding weakened purchasing power and high adjustment costs. The government has outlined plans to increase revenue and reduce the debt-service-to-revenue ratio, but achieving these targets will require effective tax administration, expenditure discipline, and sustained growth, alongside transparency in managing reform benefits.