S&P Global said it will take a majority stake in Nigeria’s oldest credit ratings agency, expanding the financial data company’s ground presence in Africa amidst a growing clamor for better assessments of the continent’s realities.
As one of the big three ratings agencies, alongside Fitch and Moody’s, S&P Global plays a crucial role in determining whether African sovereigns and businesses can secure capital from international financial markets. Its rival Fitch has been at the center of a high-profile row with the African Export-Import Bank this year over a ratings downgrade, leading both parties to sever ties with each other. S&P Global said the acquisition of Lagos-based Agusto & Co, which also operates in Ghana, Kenya, and Rwanda, demonstrates its commitment to “growth and transparency in local credit markets.” Terms of the deal were not disclosed.
The African Union has backed a plan to create a homegrown ratings agency due to launch in October. But some critics have argued that promoting data transparency around African budgets and debt stocks would have a more meaningful impact in improving the continent’s assessment by the global agencies.
