The African
Union (AU) has officially launched the African Credit Rating Agency (AfCRA).
The initiative aims to provide fair and accurate credit assessments for
African nations, countering the perceived biases of global rating agencies that
have cost the continent an estimated $75 billion in lost economic
opportunities.
The launch of
AfCRA comes amid growing criticism of international credit rating agencies,
which have been accused of employing flawed methodologies, outdated
assumptions, and systemic biases that distort Africa’s economic realities.
Kenyan President William Ruto, a vocal advocate for the initiative, emphasized
the urgent need for a credit rating system that reflects Africa’s true
potential and reduces the continent’s reliance on external assessments.
President Ruto,
speaking at a High-Level Presidential Breakfast Dialogue in Addis Ababa,
Ethiopia, highlighted the significant impact of biased credit ratings on
Africa’s development. “Africa will no longer accept to be misjudged by the
scales of global credit rating agencies that overlook our reality,” he
declared. “By relying on flawed models, outdated assumptions, and systemic
bias, these agencies have painted an unfair picture of our economies, leading
to distorted ratings, exaggerated risks, and unjustifiably high borrowing
costs.”
The
establishment of AfCRA marks a bold step toward economic sovereignty for
Africa. The agency will leverage credible data and context-specific
methodologies to provide accurate credit assessments, enabling African nations
to access affordable financing for infrastructure development, social programs,
and economic growth initiatives.
Currently, only
two African countries hold investment-grade ratings, a stark contrast to the
continent’s vast economic potential. President Ruto noted that even a
single-notch upgrade in credit ratings could unlock an additional $15.5 billion
for Africa, funds that could be channeled into critical sectors such as
healthcare, education, and infrastructure.
The AfCRA aims
to address this disparity by providing fair and transparent credit ratings that
reflect Africa’s unique economic dynamics. By doing so, the agency will empower
African nations to improve their financial standing, attract investment, and reduce
borrowing costs.
The launch of
AfCRA was supported by several African leaders, including President Tebboune
Amadjid of Algeria, President Taye Atske of Ethiopia, and President Hichilema
of Zambia, who joined President Ruto at the High-Level Presidential Breakfast
Dialogue. The leaders emphasized the importance of collaboration in building a
credible and independent credit rating agency that serves Africa’s interests.
“The
establishment of an Africa Credit Rating Agency, backed by credible data that
accurately reflects Africa’s reality, will unlock the much-needed finance to
fund the continent’s development programs and bring meaningful change to the
people,” said President Ruto.
By: Kanto Okanta
