Credit rating agencies, others will boost infrastructure funding – SEC

The Securities and Exchange Commission and other stakeholders in the capital market have said that strengthening the relationship between credit rating agencies and subnationals in the country will boost infrastructure funding in Nigeria.

This was revealed at the third edition of DataPro’s International Credit Rating Webinar themed, ‘Role of Sub-nationals and Credit Rating Agencies in Infrastructure Development’.

Speaking at the webinar, the Director-General of SEC, Lamido Yuguda, pointed out that credit rating agencies play an important role in infrastructural development by providing independent assessments of the creditworthiness of subnational governments and other borrowers which helps investors to make informed investment decisions on optimal capital allocation.

He, however, noted that there are concerns about the activities of these rating agencies and the impact on the capital market, to which Yuguda said the SEC had been proactive in mitigating here in Nigeria.

He said, “The Commission is not unaware of these concerns, and is committed at ensuring that registered rating agencies operate in a fair and transparent manner. We have taken a number of steps to protect investors and promote confidence in the debt capital market by strengthening our oversight function on rating agencies through Issuance of new regulations and amending existing ones to improve the quality and transparency of the entire credit ratings.

“I believe that the synergy between the subnational governments and credit rating agencies will potentially play a major role in promoting sustainable infrastructural developments, create a favorable investment climate and advance the country’s quest for rapid transformation.”

In his comments, the keynote speaker, Kehinde Ogundimu, said that given the enormity of the gap in infrastructure funding and the role of rating agencies, it was important for the “CRAs not to attract any negative attention to themselves.”

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