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 programmes and bring meaningful change to the people, President William Ruto has said.
Speaking in Addis Ababa, Ethiopia, on the sidelines of the 38th African Summit, Ruto said the current global financial system misrepresents, distorts, and understates Africa’s reality.
“Africa will no longer accept to be misjudged by the scales of global credit rating agencies that overlook our reality.
“By relying on flawed models, outdated assumptions, and systemic bias, these agencies have painted an unfair picture of our economies, leading to distorted ratings, exaggerated risks, and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 President said.
Ruto, who started his Presidency with an attack on the “unfair international financial architecture” said the prejudiced assessments by global credit rating agencies deter investment, distort global trade, and derail progress towards the SDGs.
“By misjudging Africa, these agencies deny opportunity to investors and economies and deprive nations of prosperity,” the President told the High-Level Presidential Breakfast Dialogue on the Establishment of the Africa Credit Rating Agency.
Other leaders present were Tebboune Amadjid of Algeria, Taye Atske of Ethiopia and Hakainde Hichilema of Zambia.
President Ruto noted that Africa Peer Review Mechanism and the United Nations Development Programme place the cost of biased credit ratings at $75 billion in lost opportunities.
In a continent abundant with natural wealth, vast arable land, billions in diaspora remittances, and the world’s largest carbon sinks, he said, credit rating agencies have delivered 94% of all downgrades in the past decade, while arbitrarily designating only two African nations as investment grade.
“We must be bold and call this for what it is: A financial straitjacket imposed on Africa. A system that punishes our economies while rewarding others, even when the fundamentals are comparable if not better. Excellencies, the foundations of global finance are supposed to be anchored on the principles of fairness, transparency, and merit. Yet, these principles are disregarded when it comes to Africa,” he said.
