Cost Reduction: Kaduna, Rating Agency Collaborates on Transparency – Commissioner
By ALEX UANGBAOJE, Kaduna
As part of measures to reduce costs and facilitate best pricing and timing of issues, Kaduna State government said it is partnering with an experienced rating agency, Fitch Ratings with intention to having the State in the rating exercise as the state implement its financial reforms.
Commissioner of Finance, Suleiman Abdu Kwari, made this known in a statement he personally signed and made available to journalists in Kaduna Tuesday, adding that the state would benefit from the outcome of the partnership as it will motivate workers and investors in the State.
The commissioner hinted that his counterpart in budget and planning and Accountant-General of the state had recently interacted with the representatives of rating company.
He observed that the partnership “will further promote state’s capital market outlook and enhance fiscal transparency”.
Suleiman, noted that Fitch rating is a key decision making criteria for offshore organizations seeking to invest in Nigeria, noting that a positive rating for Kaduna will increase its Foreign Direct Investment (FDI) inflow opportunities.
Part of the statement reads:
“it will create a wider audience for investment by giving the State a more stable and global outlook to the international community.
It will lower the cost of borrowing for the State by quoting lesser interest on fixed deposits or debentures or bonds as investors with low risk preference would come forward to invest in safe securities.
“A high rating will reduce the cost of Issues and attract investors with
minimum effort as well as facilitate best pricing and timing of issues.
“Rating will provide motivation to the State for growth as workers would feel confident in their own efforts and also encouraged to undertake expansion of their operations or new projects”.
He however added that the delegation is still engaging with Fitch towards concluding the rating process.