Key Takeaways
- S&P Global acquires majority stake in Agusto & Co., a Lagos-based credit ratings agency.
- The acquisition aims to expand S&P Global's presence in Africa's domestic credit ratings market.
- Agusto & Co. operates in Nigeria, Kenya, Ghana, and Rwanda.
S&P Global has announced the acquisition of a majority stake in Agusto & Co., a Lagos-based credit ratings agency, as part of its strategy to expand its presence in Africa’s domestic credit ratings market. This move comes at a time when African leaders and finance ministers are arguing that the world’s leading credit ratings agencies overstate political and economic risks across the continent, thereby raising borrowing costs and constraining economic growth.
The acquisition is expected to support the growth strategy of S&P Global's African business, which currently relies primarily on its South African office. Agusto & Co., founded in 1992 by Nigerian economist Olabode Agusto, has established a strong presence in Nigeria, Kenya, Ghana, and Rwanda, making it an attractive partner for S&P Global. This deal marks the first of its kind for the US-based S&P on the continent, although its subsidiary, S&P Global Commodity Insights, already has an office in the Nigerian capital Abuja.
According to Yann Le Pallec, president of S&P Global Ratings, the acquisition will support transparency in local credit markets across Africa. Similarly, Yinka Adelekan, Agusto & Co. managing director, believes the deal will contribute to the development of transparent and resilient credit markets across the continent. The acquisition is expected to be closed in the second half of the year, although details of the transaction were not disclosed.
The acquisition of Agusto & Co. is a significant step for S&P Global as it seeks to strengthen its position in Africa's rapidly growing economy. With this move, S&P Global aims to provide more accurate and contextualized credit ratings that reflect the unique characteristics of African markets. As the continent continues to grow and attract international investment, the need for reliable and informed credit ratings has never been more pressing.
Why This Matters
This acquisition matters because it has the potential to enhance economic growth in Africa by providing more accurate credit ratings and increasing transparency in local credit markets. By supporting the development of transparent and resilient credit markets, S&P Global and Agusto & Co. can contribute to a more stable and prosperous economic environment for the continent.