• Wednesday, April 17, 2024
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BusinessDay

Why Kwara withdrew from Fitch, by Ahmed

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  The Kwara State governor, Abdulfatah Ahmed, says the state government withdrew from ratings agency, Fitch, because the annual rating was no longer required for any major financial transaction.

Speaking on a monthly interactive programme, ‘The Governor Explains’, Governor Ahmed said Kwara State invited Fitch to rate the state as a prelude to raising funds from the capital market in 2008/9 and to benchmark against best practices in financial management.

“We decided as a state when we were going to issue a bond in the capital market to explore the possibility of not only accessing the capital market but also showcasing ourselves to the world as benchmarking against best practices”, he emphasised.

Governor Ahmed, who said that Kwara State was the first in Nigeria to be rated by Fitch, noted that the invitation was on transactional basis, adding that the state decided not to renew the annual rating this year.

“If you want to continue to be rated you pay for it and continue to submit data which will be analysed. We did it up till last year. We now feel that since we don’t have any major thing we require the rating results for now we can step it down this year”.

The governor explained that the withdrawal from Fitch rating has nothing to do with the state’s financial standing. According to him, “For those who don’t understand, it has nothing to do with our efficiency as a government. What it tells you is that we do not need that rating to do anything this year”. Besides, Fitch is not registered with the Securities and Exchange Commission (SEC) and could therefore not have rated our bond”.

On whether the state would opt for more loans on the maturity of the present bond to finance infrastructural projects, Governor Ahmed asserted that securing loans for infrastructural development was expedient for a government committed to making life better for the people.

In response to a caller’s suggestion of regional integration between Kwara and its neighbouring states, Governor Ahmed said his administration was ready to cooperate with states and organisations that share similar strengths and advantages with Kwara State for the economic development of the region.

He, however, noted that political considerations hinder efforts that could boost cooperation. According to him, “Unfortunately, we find it difficult to separate politics from economic activities. Ordinarily, we should be having economic integration, but because there has been too much partisan consideration there is hardly any platform for cooperation”.