Economy
Fitch Affirms AfDB’s Triple ‘A’ Rating With Stable Outlook
By Modupe Gbadeyanka
Renowned global rating agency, Fitch Ratings, has affirmed the African Development Bank’s (AfDB) Long-Term Issuer Default Rating (IDR) at ‘AAA’ with a Stable Outlook and its Short-Term IDR at ‘F1+’ (best quality grade, indicating exceptionally strong capacity to meet its financial commitments).
Fitch, in a recent statement, disclosed that the ‘AAA’ rating primarily reflects extraordinary support from AfDB’s shareholders which provides a three-notch uplift over the Bank’s intrinsic rating.
It specifically said, “AfDB enjoys strong support from its 80 member states, which include 26 non-African countries with high average ratings.
“Callable capital subscribed by member states rated ‘AAA’, the largest of which are the US, Germany and Canada, accounts for 21 percent of the total.
“This fully covered the Bank’s net debt at end-2016, underpinning the ‘aaa’ assessment of shareholders’ capacity to support.”
The report underscores the strong propensity of member states to support the Bank in case of need as illustrated by previous capital increases and the Bank’s important role in the region’s financing.
In the assessment, Fitch maintains that fast growth in AfDB’s lending in the last two years has translated into a rapid increase in its indebtedness, noting that the bank’s management has indicated that if there is no clear evidence of a capital increase within the next two years, it will have no choice but to curb lending growth to preserve the Bank’s solvency metrics.
The report added that if no capital increase is approved by 2019, debt will not be fully covered by callable capital from ‘AAA’ rated countries, adding that this would place substantial pressure on Fitch’s assessment of extraordinary support and, hence on AfDB’s IDR.
Fitch asserts that the relatively high risk profile of borrowers is mitigated by the preferred creditor status (PCS) that the Bank enjoys on its sovereign exposures.
Fitch assesses AfDB’s liquidity at ‘AAA’, which reflects excellent coverage of short-term debt by liquid assets (2.9x).
However, Fitch notes that the share of the portfolio invested in securities or bank placements rated ‘AA-‘ or above (83 percent in 2016) is declining, although their quality is still assessed at excellent.
Fitch understands that management intends to rebalance the treasury assets portfolio in order to increase the proportion of assets rated ‘AA-‘ or above.
This would help underpin Fitch’s assessment of the strength of extraordinary support, given the relevance of liquid assets’ quality to the net debt calculation.
“The -1 notch adjustment to AfDB’s solvency stemming from our assessment of its business environment reflects the high risk operating environment in which the bank operates,” the report says, noting that the majority of African countries are classified as low income by the World Bank.
The average income per capita and average rating of member states are the lowest of all regional MDBs, and they are subject to an overall high level of political risk.
Commenting on the rating, AfDB Acting Vice-President for Finance, Hassatou Diop N’Sele, said, “We welcome the confirmation of the AfDB’s AAA rating by Fitch, with a stable outlook. The Bank is dedicated to doing the most to make a marked positive difference in the lives of hundreds of millions of Africans, while at the same time preserving its financial integrity.
“Our High 5 agenda is our response to the need to accelerate and scale up Africa’s development to achieve the Sustainable Development Goals of the continent. The High 5 agenda, reflecting five identified priority areas (namely energy, agriculture, industrialization, integration and human capital development), enjoys strong support from our shareholders.
“The AfDB will continue to maintain a careful balance between maximizing its development effectiveness and assuring complete preservation of the interests of its stakeholders.”
By Adedapo Adesanya
The Federal Inland Revenue Service (FIRS) has issued a statement providing further clarifications following comments and reports on the recent memorandum of understanding between Nigeria and France on taxation.
The MoU, signed on December 10, 2025, at the French Embassy in Abuja by the chairman of FIRS, Mr Zacch Adedeji and French Ambassador, Mr Marc Fonbaustier, on behalf of France’s Direction Générale des Finances Publiques (DGFiP), focuses on key areas, including digital transformation, workforce development, information exchange, transfer pricing, and tackling base erosion and profit shifting.
However, the MoU has been met with resistance from opposition coalition party African Democratic Congress (ADC) as well as Northern elders, which both raised serious questions about transparency, national sovereignty and the safety of Nigerian consumers’ data.
In response, the tax authority, which will become known as Nigerian Revenue Service (NRS) from next year, emphasised that the deal does not grant France access to Nigerian taxpayer data, digital systems, or any element of the country’s operational infrastructure.
“All existing Nigerian laws on data protection, cybersecurity, and sovereignty remain fully applicable and strictly enforced. The NRS, like its predecessor, FIRS, places the highest premium on national security and maintains rigorous standards for the protection of all taxpayer information.”
It said similar MoUs are signed by tax administrations around the world to promote collaboration, knowledge sharing, and the adoption of global best practices.
“The DGFIP is among the world’s most advanced tax authorities, with over a century of institutional experience and deep expertise in digital transformation, taxpayer services, governance, and public finance.
“This partnership simply enables Nigeria to learn from that experience. It is advisory, non-intrusive, and entirely under Nigeria’s control.
“Contrary to misconceptions, the MoU does not displace local technology providers, FIRS and the emerging Nigeria Revenue Service (NRS) continue to work closely with Nigerian innovators such as NIBSS, Interswitch, Paystack, and Flutterwave. The MoU does not include the provision of technical services; it is limited to knowledge sharing, institutional strengthening, workforce development, policy support, and best-practice guidance.
“We welcome robust public engagement on tax reforms, but such conversations must reflect the actual content and purpose of the agreement. Rather than undermining Nigeria’s sovereignty, this MoU strengthens it by helping to build a modern, capable, globally competitive tax administration one firmly in command of its systems, data, and strategic direction.
“FIRS remains committed to transparency, professionalism and partnership that advance Nigeria’s long-term economic development,” it said in a statement.
By Adedapo Adesanya
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued permits to 28 companies under Nigerian Gas Flare Commercialisation Programme (NGFCP), a scheme that aims to end routine gas flaring to cut carbon emissions and use some of the gas to generate power.
Gas flaring is the controlled burning of natural gas that is released during oil extraction. The initiative marks a major step toward ending flaring and monetising wasted gas.
The projects could capture 250 to 300 million standard cubic feet per day (mmscfd) of gas currently flared, cut about 6 million tonnes of CO₂ annually, and unlock nearly 3 gigawatts of power generation potential, an NGFCP document showed.
Nigeria expects the initiative to attract up to $2 billion in investment and create more than 100,000 jobs. It could also produce 170,000 metric tonnes of LPG annually, providing clean cooking access for 1.4 million households.
The permits follow a competitive bid round that awarded 49 flare sites to 42 bidders after the programme was restructured post-COVID-19 and the Petroleum Industry Act.
Speaking on this, Mr Gbenga Komolafe, head of the NUPRC, during the presentation of the certificates to the 28 companies said, “The NGFCP is a pillar in our quest to eliminate routine flaring, reduce emissions, and enhance Nigeria’s global credibility in energy transition commitments.”
The programme aligns with Nigeria’s Energy Transition Plan and aims to turn flare gas from an environmental liability into an economic asset.
The 28 companies have signed key agreements, including Connection, Milestone Development and Gas Sales Agreements, and now qualify for permits to access flare gas.
Producers will benefit from reduced liabilities, improved Environmental, Social, and Governance (ESG) performance and alignment with the government’s decarbonisation agenda.
Development partners, including Power Africa, KPMG, World Bank’s Global Gas Flaring Reduction initiative, USAID and financiers, have supported the programme with technical and commercial frameworks.
Mr Komolafe said while the permits mark a milestone, engineering, construction and financing must begin in earnest.
“The real work starts now,” the official added. “This programme will create economic, industrial and environmental value while strengthening Nigeria’s energy transition.”
By Adedapo Adesanya
Three bellwether stocks lifted the NASD Over-the-Counter (OTC) Securities Exchange by 0.62 per cent on Friday, December 12 with the NASD Unlisted Security Index (NSI) jumping by 22.20 points to 3,600.43 points from 3,578.23 points.
In the same vein, the market capitalisation of the trading platform increased by N13.28 billion to close at N2.154 trillion from the previous day’s N2.140 trillion.
During the session, Central Securities Clearing System (CSCS) Plc went up by N2.53 to close at N39.71 per share compared with the previous day’s N37.18 per share, Geo-Fluids Plc added 35 Kobo to its price to finish at N5.00 per unit versus Thursday’s closing price of N4.65 per unit, and FrieslandCampina Wamco Nigeria Plc appreciated by 23 Kobo appreciation to sell at N60.23 per share versus N60.00 per share.
It was observed that yesterday, the price of Golden Capital Plc went down by N1.05 to N9.45 per unit from N10.50 per unit, and UBN Propertiy Plc declined by 21 Kobo to N2.01 per share from the N2.22 per share it was traded a day earlier.
There was a significant improvement in the level of activity for the day, as the volume of transactions increased by 6.2 per cent to 37.4 million units from the previous day’s 35.2 million units, the value of trades went up by 265.1 per cent to N4.9 billion from N1.4 billion, and the number of deals soared by 13.80 per cent to 33 deals from 29 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the last trading day of this week as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, the second spot was taken by Okitipupa Plc with 178.9 million units traded for N9.5 billion, and third space was occupied by a new comer in MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc also finished the session as the most active stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units valued at N420.3 million, and Impresit Bakolori Plc with 537.0 million units sold for N524.9 million.
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