S&P Global’s Agusto deal signals global race for Africa’s credit market

S&P Global’s move to acquire a majority stake in Agusto & Co. marks a strategic shift for the world’s top credit rating agencies. As global capital markets face criticism over how they evaluate and price African economies, S&P is moving to establish a deeper local presence.

The transaction, subject to regulatory approvals, will give S&P Global a controlling interest in one of Africa’s oldest domestic rating agencies, with operations in Nigeria, Kenya, Ghana, and Rwanda. Financial terms were not disclosed, but the deal is expected to close in the second half of 2026.

The acquisition comes as African governments increasingly rely on domestic debt markets to finance infrastructure and budget deficits while private companies turn to local capital markets for long-term funding. At the same time, concerns over the credibility and consistency of global sovereign and corporate ratings have intensified across the continent.

A strategic bet on Africa

For S&P Global, the acquisition provides immediate access to one of Africa’s most established domestic credit assessment platforms, complementing its international sovereign and corporate ratings business with stronger local market intelligence.

“We are delighted to partner with Agusto & Co. to strengthen our domestic ratings presence across Africa,” Yann Le Pallec, president of S&P Global Ratings, said in a joint statement.

He said combining S&P’s international analytical capabilities with Agusto’s regional expertise would improve transparency, strengthen local credit markets, and enhance investor confidence across the continent.

Founded more than three decades ago, Agusto & Co. has built a reputation as one of Africa’s leading domestic rating agencies, rating banks, corporates, insurance companies, and structured finance transactions while expanding beyond Nigeria into Kenya, Ghana, and Rwanda.

Yinka Adelekan, managing director of Agusto & Co., described the partnership as fulfilling the vision of the company’s late founder to affiliate with a leading global ratings institution.

He said the transaction would combine Agusto’s regional expertise with S&P Global’s international resources, research capabilities, and analytical network to create broader opportunities for issuers and investors across Africa.

Despite the ownership change, Agusto said it would continue operating as an independent domestic rating agency, maintaining its own methodologies and issuing ratings under applicable local regulatory frameworks.

Why the deal matters now

The acquisition comes amid growing international interest in African capital markets following macroeconomic reforms in several countries, including Nigeria.

According to Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), S&P’s decision reflects the increasing strategic importance of Nigeria and Africa within global financial markets.

“They want better local information and a stronger institutional footing. When rating agencies are far away, they sometimes do not have the quality of information they need because they rely on consultants or secondary sources,” Yusuf told BusinessDay.

“Perhaps Nigeria has now assumed a status that requires a stronger institutional presence. The reforms have improved macroeconomic indicators, and there is increasing international interest in the Nigerian economy.”

Yusuf said the acquisition should improve Agusto’s institutional capacity while strengthening the credibility of its ratings through access to global expertise.

“If there was no value, S&P would not acquire the company. It also validates the institution and demonstrates confidence in the local market,” he said.

Abdulrauf Bello, an investment analyst, said S&P Global’s acquisition of Agusto & Co. suggests that global rating agencies increasingly view Nigeria and Africa as strategic growth markets, even if the company’s precise motivation remains unclear.

“The broader interpretation is that foreign players now consider Nigeria and parts of Africa worth deeper investment and engagement. Rating agencies are also businesses looking for growth opportunities, and partnering with a local player like Agusto gives S&P a better understanding of market realities that may be difficult to capture from outside the continent,” Bello told BusinessDay.

“It tells me that something is changing in how foreign institutions see Nigeria. Over time, that could translate into stronger investor interest, capital inflows and ultimately support broader economic growth,” he said.

Ratings under increasing scrutiny

The transaction comes against the backdrop of mounting criticism of the world’s three largest rating agencies: S&P Global, Moody’s, and Fitch Ratings, over their assessments of African economies and institutions.

African policymakers have argued that rating methodologies often fail to capture local realities, leading to higher borrowing costs for governments and businesses.

The debate has been fuelled by several high-profile rating disagreements.

Between June 2025 and June 2026, the three major agencies reached materially different conclusions on the creditworthiness of the African Export-Import Bank (Afreximbank). Fitch downgraded the lender to BB+ before withdrawing its ratings after the bank terminated its mandate, while S&P Global later assigned Afreximbank a BBB+ investment-grade rating, three notches higher than Fitch’s assessment.

Another example was Fitch’s downgrade of Dangote Industries in August 2024, citing risks associated with the construction of the Dangote Refinery. A year later, the refinery had become a major contributor to Nigeria’s industrial output and external trade balance, prompting renewed questions about whether global rating models adequately account for long-term structural investments.

On July 23, Dangote Petroleum Refinery and Petrochemicals completed a landmark $2.5 billion private equity placement after the offer attracted demand more than three times the initial size.

The company said the transaction, which achieved a 3.7 times subscription rate, resulted in the issuance and allotment of approximately $2.5 billion in new equity.

Also, the differing assessments of the African Finance Corporation by S&P’s New York and Chinese operations, alongside Moody’s downgrade of Kenya, contrasted with S&P’s decision to maintain its sovereign rating, highlighting inconsistencies among agencies evaluating similar economic fundamentals.

Analysts say such differences matter because lower ratings increase borrowing costs by forcing governments and companies to pay higher interest rates to access capital markets, reducing funds available for infrastructure and development.

Tinubu pushes for an African alternative

The acquisition also comes as President Bola Tinubu renewed calls in February in a piece on the Financial Times (FT) for Africa to establish its own continental credit rating agency.

Tinubu argued that Africa continues to pay an unjustifiable premium to access international capital because the dominant rating agencies place excessive weight on subjective assessments of political and institutional risks while maintaining a limited presence on the continent.

He said only three African countries currently enjoy investment-grade ratings despite the International Monetary Fund projecting Africa to be the world’s fastest-growing region this year.

The president cited a 2023 United Nations Development Programme report estimating that rating inefficiencies cost Africa about $75 billion annually through higher borrowing costs and missed financing opportunities.

Tinubu argued that an African credit rating agency would provide assessments that better reflect economic fundamentals while addressing concerns over what many policymakers describe as an “Africa premium.”

Part of a broader global trend

S&P’s investment follows a similar strategy adopted by Moody’s.

In 2022, Moody’s acquired a 51 percent stake in South Africa-based Global Credit Ratings (GCR), before completing a full acquisition in 2024, citing expectations of robust growth in demand for credit rating services across Africa.

Fitch Ratings also maintains extensive sovereign and corporate coverage across the continent, although its assessments have increasingly come under scrutiny from governments and multilateral institutions challenging the assumptions underpinning some of its ratings.

Together, the moves suggest Africa’s domestic ratings industry is becoming strategically important as international investors seek better local intelligence and governments deepen domestic capital markets.