Nigerian government mandates standard chartered bank as sovereign credit ratings advisor
Tuesday 19 July 2011, Lagos
During the official visit of The Honourable British Prime Minister, David Cameron to Nigeria, the Honourable Minister of State for Finance of Nigeria Dr. Yerima Ngama and the Group CEO of Standard Chartered, Peter Sands, signed Standard Chartered's mandate to serve as sovereign credit ratings advisor for the Federal Republic. This was marked with a signing ceremony at Southern Sun Hotel in Lagos, Nigeria. Nigeria currently maintains credit ratings from Standard & Poor's (a division of the McGraw-Hill Companies) and Fitch Ratings.
Nigeria's sovereign credit ratings are important indicators for international investors and support the Central Bank's efforts to increase foreign participation in the domestic capital markets, as evidenced by the recent relaxation in the minimum holding period for domestic government bonds. In addition, following the inaugural overseas US Dollar bond offering by the sovereign itself in January, Nigerian corporations and banks are increasingly accessing the international markets to finance their expansion plans. For these borrowers, the sovereign ratings are of critical importance as they set a benchmark for their own ratings, impacting their financing cost in overseas markets.
Signing the mandate on behalf of the Nigerian Government, the Honourable Minister, Dr. Yerima Ngama commented, "The formalisation of this alliance this morning is a clear attestation to the fact that a key component of Nigeria's future economic success is strategic partnerships. Nigeria needs the collaborative efforts of both public and private sector leaders to achieve the level of investment and development needed to reposition the country as a dominant economy in Africa and to actualize the goals of Vision 20:2020. We are confident about Standard Chartered Bank's vast knowledge of the operating environments of developing countries like Nigeria and its strong view that Nigeria deserves a better rating given the progress made so far".
Peter Sands, Group Chief Executive of Standard Chartered, who signed the mandate on behalf of the Bank commented, "Standard Chartered views its role as ratings advisor as part of its intensive engagement with the Bank's government clients and as an avenue to help communicate the strengths of Nigeria to the international market. We see this role as part of our effort to fulfil our brand promise of being 'Here for good'."
In Africa, Standard Chartered also serves as ratings advisor to Ghana and Senegal.
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In 1965, the Standard Bank of South Africa merged with the Bank of West Africa acquiring businesses including a banking operation in Nigeria, which dated back to 1894. The name was then changed to Standard Bank of West Africa. Four years after the merger, Standard Bank Nigeria was incorporated locally to take over the business in Nigeria. In 1971, 13% of the share capital was placed with Nigerian investors. The end of the civil war saw a major economic upturn and as a consequence, the military government sought to increase local control of the retail-banking sector, hence the Bank's investment in Standard Bank Nigeria (renamed First Bank of Nigeria in 1979) was reduced to 38%. Standard Chartered remained a shareholder of First Bank of Nigeria until 1996.
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