A credit rating agency tailored to address the specific requirements of Africa’s sovereign borrowers is expected to be operational by next year, according to an African Union representative.
The entity will not be under the ownership of the regional organisation, Albert Muchanga, the AU’s commissioner for development, trade, tourism, industry, and minerals, announced to journalists in Accra, Ghana. He emphasised that it would be “independent and professional.”
“We feel that we’ve not been treated very well when it comes to ratings and the cost of borrowing,” Muchanga said. “We want an institution developed by Africans to contribute to the process of de-risking the African capital market so that in the end we can have a situation where we can borrow competitively at home and abroad.”
African finance ministers initially proposed creating this agency in 2021, citing grievances over biased treatment by global credit rating agencies, which they claimed resulted in higher interest rates compared to other emerging markets and developed nations.
The initiative is being spearheaded by the African Peer Review Mechanism, African Development Bank, African Export-Import Bank, and the AU Commission, Muchanga explained. The project is now advancing to the next operationalisation stage, which involves “coming up with the final work plan to ensure that we are able to roll it out,” he added.
Attribution: Bloomberg