The latest Fitch rating has upgraded the credit rating of Rivers State government to BB – from B + with ‘outlook stable’.
The agency has simultaneously affirmed Rivers’ National Long-term rating at ‘AA-(nga)’ with stable outlook.
The release of the report has coincided with the announcement of highest-ever internally generated revenue (IGR) of N9.59 billion.
In December 2012, Standard and Poor’s (S&P) had equally upgraded the state’s credit rating, also giving very positive outlook.
Fitch began rating Rivers State about 2011 and released reports in both Milan and Barcelona assigning ‘B+’ and national long-term rating at ‘AA’ (nga) to the state.
This seemed to brighten the chances of the state to issue initial N150 billion bond. This is yet to be drawn down.
The rating which was immediately flashed around the world by Bloomberg of London, said the upgrade “reflects the development of non-oil revenues alongside the state’s commitment to moderate cost growth and continued stabilisation of socio-economic issues in the Niger Delta region”.
It also alluded to steady development in the non-oil sector and IGR which it said grew from N60 billion in 2011 to about N75 billion in 2012 as well as the implementation of a digital tax system, introduction of biometrics, tax administration law and tax harmonisation bills.
“Fitch expects the reduction in errors and improvements in tax collection methods to boost IGRs towards N100 billion by 2015, eventually representing about 30 percent of Rivers’ annual income from about 20 percent in 2010-2012”.
The commissioner of information and communications, Ibim Semenitari, said, “The rating is interpreted to mean, ‘it’s good to do business with you’. That is quite a message, especially in an era where people hardly understand the dynamics of an economy. Now, an agency like Fitch says it is good to do business with you”.
She said the Chibuike Rotimi Amaechi administration has been striving to implement such measures as sanitising the financial system, trying to ensure that all the ministries reduced wastages, leakages and reduce cost especially by cleaning up the financial processes.
“There is also the biometric system which ensures that the real workforce is captured appropriately to reduce the incidence of ghost workers. There is effort in fiscal disciple in the budget. This year, the governor has said it would be stricter, more improved fiscal discipline to ensure that, again, we are able to render accountable stewardship”.