Addressing the critical issue of capital acquisition for infrastructure development in Sovereign States and Sub-nationals is an ongoing challenge for developing countries. Recently, DataPro Limited, a technology-driven Credit Rating Agency, held the 2023 International Rating Webinar, shedding light on the diverse options available.
The event, themed “The Role of Sub-nationals and Credit Rating Agencies in Infrastructure Development,” aimed to unlock financing avenues and harness the potential of Credit Rating Agencies (CRAs) to spur economic growth.
Capital Market Operators, State Governments, and global stakeholders gathered for this digital event, featuring a goodwill message by Mr. Abdulkabir Abass, representing the Director General of the Securities and Exchange Commission (SEC). Mr. Abass underscored the pivotal role of credit rating agencies in independently assessing the creditworthiness of subnational governments and other borrowers, aligning with the SEC’s initiatives to fortify the Nigerian capital market.
Highlighting the Ten-Year Capital Market Master Plan launched in 2014 and revised in November 2022, Mr. Abass detailed initiatives fostering debt capital market growth. These innovations aim to unlock private capital for infrastructural projects that sub-nationals can leverage, aligning with the SEC’s commitment to market repositioning and investor protection.
The Panel Discussion, skillfully moderated by DataPro’s Chief Operating Officer, Prince Oladele Adeoye, featured financial experts: Mr. Adeniran Ajakaiye, Managing Director, Africa Plus Partners; Mr. Egie Akpata, Director and Co-owner, UCML Capitals Limited; and Mr. Peter Onyango, Chief Investment Officer, African Development Bank. The panel deliberated on “Subnational Finance for Infrastructure: Issues for Consideration.”
The panelists emphasised the critical link between securing suitable infrastructure financing and project sustainability. Addressing challenges like political interference and limited investment-grade ratings for Nigerian states, they proposed private sector investment in smaller, showcase projects before venturing into larger initiatives. Financing avenues discussed ranged from traditional bank borrowing to exploring Public-Private Partnerships, leveraging international grants, employing Special Purpose Vehicles (SPVs) for innovative financing, and enhancing revenue collections.
As financial experts unanimously agreed, the success of subnational infrastructure development lies in a strategic blend of diverse financing options, ensuring both viability and long-term sustainability for impactful projects. The insights shared during this webinar serve as a valuable guide for stakeholders navigating the intricate landscape of infrastructure financing.