S&P Global announced Tuesday its acquisition of a majority stake in Lagos-based credit ratings agency Agusto & Co. This strategic move aims to bolster S&P's presence in Africa's domestic credit ratings market.

The acquisition arrives amid ongoing discussions by African leaders and finance ministers who contend that major global ratings agencies tend to overestimate risks on the continent, thereby increasing borrowing costs and hindering economic expansion. S&P Global stated that this investment will fuel its African business growth strategy, which has largely relied on its South African operations.

Founded in 1992 by Nigerian economist Olabode Agusto, Agusto & Co. currently operates in Nigeria, Kenya, Ghana, and Rwanda. This marks S&P's inaugural acquisition of this nature in Africa, though its subsidiary, S&P Global Commodity Insights, maintains an office in Abuja. Yann Le Pallec, president of S&P Global Ratings, highlighted the acquisition's role in promoting "transparency in local credit markets" across Africa. Yinka Adelekan, Agusto & Co.'s managing director, echoed this sentiment, emphasizing the deal's contribution to developing "transparent and resilient credit markets."

Financial details of the transaction were not disclosed, with closure anticipated in the second half of the year.