At DataPro’s 4th International Rating Webinar, Bola Ajomale, Executive Commissioner of Operations at the Securities and Exchange Commission (SEC), urged capital market operators to reassess the rising issuance of debt by state and local governments in Nigeria. Representing the SEC Director-General, Ajomale stressed that Irrevocable Standing Payment Orders (ISPOs) from State Governments should not be the sole assurance for risk mitigation. He enjoined the Credit Rating Agencies (CRAs) to adopt broader metrics that account for heightened risk and sustainability in assessing debt instruments from government bodies.

Ajomale also raised concerns about States issuing private bonds guaranteed by the government without secondary market value or proven project deliverables. He encouraged the webinar participants to leverage CRAs to drive sustainable economic growth in Nigeria.

The event, attended by over 500 participants from across Africa, the U.S., and Canada, underscored the importance of CRAs in Nigeria’s financial landscape. DataPro Founder Abimbola Adeseyoju highlighted the webinar as a platform to demonstrate the value proposition of CRAs in supporting asset quality assessment, capital management, and economic growth.

During the panel discussion moderated by DataPro’s Chief Rating Officer, Prince Oladele Adeoye, experts such as Sam Omukoko from Kenya’s Metropol Rating Agency, Dr. Sonnie Ayere of DLM Capital Group, and Chapel Hill Denham’s Managing Director Mrs. Kemi Awodein discussed the resilience of Nigerians amid economic uncertainty. They emphasized the need for CRAs to offer clear insights for investors and advocated for the development of robust capital markets to shield African economies from external shocks.

The panelists also tackled the balance between domestic and external borrowing. While external loans often have lower interest rates, they come with conditionalities; conversely, domestic borrowing in local currency mitigates default risks and reduces dependency on international institutions. The need for African nations to strengthen their domestic capital markets was underscored as a strategic pathway to sustainable growth.

The discussion concluded with a call for CRAs to prioritize investor interests by delivering transparent assessments of economic conditions and asset classes.