S&P seeks to ward off critics with African acquisition
The Big Three firm has acquired Agusto & Co as it looks to deepen its coverage on the continent following criticism that it is out of touch.
Africa's financial systems are fragmented, making it difficult to channel available capital into infrastructure and businesses needed for sustainable growth. Samira Mensah, head of S&P Global's Africa National Ratings, emphasizes that Africa has meaningful pools of domestic savings, but too little of this capital is being channeled into long-term productive investment.
In July, S&P completed the acquisition of a majority stake in Agusto & Co, a Nigerian-based pan-African credit rating agency. This acquisition is seen as a strategic move to expand credit markets and deepen them in relevant regions. Nigeria is considered crucial to S&P's strategy, as Africa's financial markets often overlook local nuances.
While global agencies like S&P have faced criticism for not adequately reflecting African realities, S&P's acquisition of Agusto & Co aims to address this by combining global analytical capacity with local expertise. The GEMS database, which captures credit-loss experience across multilateral development banks, is also being incorporated into S&P's risk-adjusted capital framework. This move could potentially free up additional capital for Africa's financial markets.
Written by urgent.news from Africa Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
