The quest for improved infrastructural growth and development can be achieved with the effective collaboration of credit rating agencies.
Making this case was a cross-section of experts who spoke at a public forum at the weekend.
The virtual workshop tagged: ‘Booting Infrastructural Development through Pension Fund Investment: The Role of Credit Rating Agencies’ was the brainchild of Nigeria’s technology-driven credit rating Agency (CRA), DataPro.
Justifying the need for the webinar, Abimbola Adeseyoju, Managing Director of DataPro Limited, said it is aimed at analysing the role of credit rating agencies in the efficient allocation of resources within the capital market and national economy.
Commenting on the webinar, Mr. Abimbola Adeseyoju, Managing Director, DataPro Limited stated that the infrastructural gap in the country is one that we are convinced can be plugged with effective utilisation of the available pension funds.
”At this year’s event, we discussed Pension Funds’ role in bridging this bourgeoning infrastructure gap, alongside Pension Funds administrators’ investment strategies.”
Pressed further, he said, “The annual webinar series by DataPro was conceptualised to increase the awareness and knowledge among Nigerians on the value propositions of Credit Raters in accelerating economic development, efficient allocation of resources and promoting a shift towards a credit economy with financial opportunities for everybody.”
According to him, the 2022 edition of the event focuses on pension funds given the fast-growing amount of pension funds available for investment which has led to an increasing shift in conversations and concerns on how operators can effectively manage the assets in the interest of the ultimate beneficiaries.
“Despite the recent review of the Pension Law Fund allocation to allow for a broader range of investments, Pension Fund Administrators continue to make only limited allocation to infrastructure developments.”
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Citing a recent report which revealed that combined with private equity and real estate investments, allocation to infrastructure hovers between 1.5% and 2.1% annually in Nigeria, which is dire for the long-term growth of the nation.
“By contrast, Pension Fund Administrators in Australia, Canada, Japan, Netherlands, Switzerland, UK and the US allocate well in excess of 26% of funds to real estate, private equity and infrastructure.”
Raising some posers, Adeseyoju said, “The issues arising therefore are how we ensure equitable returns on the Pension Funds? What other Investment options are open to Pension Funds Administrators? How do we utilise Pension Funds for National Development? Nigeria currently is faced with an infrastructural deficit of about $100b annually. It is estimated that the country needs up to $3trillion over the next 30 years to bridge its infrastructural development deficit.”
Financial Markets, Institutions and Risk Management professor in Italy, Marco Giorgino, who delivered the keynote speech while espousing on the topic ‘The Reshaping of the Financial Industry: The Major role of FinTech and Data for Rating,’ dwelt on the role of global risk management, corporate finance as well as corporate and investment banking.
The event also featured a panel session with experts in the value chain discussing the need to unlock infrastructure asset opportunities for Pension Managers through credit rating.
Amongst these panelists include Mr. Peter Ashade, Group Chief Executive Officer, United Capital Plc; Mr Suru Daniels, Managing Director, Afrinvest Capital Limited; Mr Olufemi Odukoya, Managing Director, Sterling Pensions Limited.; Mr Dave Uduanu, Managing Director, Sigma Pensions Limited; and moderated by Mr. Oladele Adeoye, Executive Director, DataPro Limited.
The highpoint of the event was the signing of the partnership agreement between DataPro and Mode Finance International on RaaS (Rating as a Service) Credit Risk Management Tool named Tigran for DataPro.
Also at the event includes Mr Lamido Yuguda, Director General, Securities and Exchange Commission; Mrs Aisha Dahir-Umar, Director General, PENCOM; Mr A.B Okauru, Director General, Nigerian Governors’ Forum; Mr Faheem Ahmed, President, Islamic International Rating Agency; Mr Cristian Giacomini, Chief Executive Officer, Mode Finance International; Mr Stan Zeze –Founder, Bloomfield Rating Agency and Initiator, Pan-African credit rating agencies.