DataPro MD Urges Government to Mandate Credit Ratings in Investments
The Managing Director of DataPro Limited, Abimbola Adeseyoju, has called on all tiers of government in Nigeria to mandate their agencies to only invest in companies with verified credit rating reports. This comes in the wake of a contentious international dispute involving the Federal Government, the Ogun State Government, and a Chinese firm, Zhongfu International Investment FXE, which led to the temporary seizure of three Nigerian presidential jets in France.
Adeseyoju, reacting to the controversy, highlighted the importance of credit ratings in safeguarding government investments. He noted that a credit rating report could have exposed the dubious activities of Zhongfu, the company at the centre of the dispute, thereby preventing the current embarrassment faced by Nigeria on the global stage.
The incident traces back to a terminated contract between Ogun State and Zhongfu, which resulted in the Chinese firm successfully petitioning a French court to ground three Nigerian presidential jets. While one of the jets was later released following a request from President Bola Tinubu, the legal and diplomatic battle continues as both the state and federal governments seek to overturn the judgement.
Former Governor Ibikunle Amosun, who was in office when the deal was made, clarified in a statement over the weekend that his administration had revoked Zhongfu’s management rights over the Ogun Free Trade Zone. This decision, he explained, was based on recommendations from the Chinese government, the Department of State Services, and the Nigeria Export Processing Zones Authority, after discovering that Zhongfu had misled his government.
Amosun further revealed that the dispute stemmed from a rivalry between two Chinese companies, China Africa Investment FXE and Zhongfu International Investment FXE, which disrupted business operations and endangered public safety in the region. He admitted that he was deceived into entrusting the free trade zone to Zhongfu, only to later learn that their claims were false.
Addressing the situation, Adeseyoju emphasized that the role of credit rating agencies is to provide transparency and reliability in business dealings. “A credit rating report would have established the true position of the company currently causing Nigeria such a big international embarrassment,” he said. He urged the government to adopt a stringent policy requiring credit rating reports before any public funds are invested, similar to the regulations governing pension custodians, who are barred from investing in non-investment-grade entities.
Adeseyoju pointed out that the reduction in bank failures in Nigeria could be attributed to the increased reliance on credit ratings by financial institutions. He further noted that even the Nigerian Upstream Petroleum Regulatory Commission mandates credit ratings before committing funds to investments for host communities.
In conclusion, the DataPro MD stressed that no government agency should enter into agreements without first obtaining a comprehensive credit rating report. He questioned how a state government could have been misled into an agreement that has now resulted in significant diplomatic and financial repercussions.
DataPro Limited, a licensed Credit Rating Agency in Nigeria, is recognized by the Securities and Exchange Commission and has over a decade of experience in the industry. The firm is also authorized by the Nigeria Data Protection Commission to provide data protection compliance services.
