Africa unveiled its own credit rating agency to push back against what leaders call an unfair and costly bias by global rating firms.
Why it matters
Kenyan President William Ruto says global credit rating agencies have “deliberately failed Africa,” relying on outdated models that exaggerate risks and inflate borrowing costs for the continent.
- A study by the Africa Peer Review Mechanism and the UNDP estimates the cost of biased credit ratings at $75 billion in lost opportunities.
- A one-notch rating upgrade could unlock $15.5 billion in funding, easing reliance on development aid and supporting infrastructure projects.
What they’re saying
“Global credit rating agencies have not only dealt us a bad hand, they have also deliberately failed Africa.” — William Ruto, at the launch of the African Credit Rating Agency in Addis Ababa.
- The African Union has criticized Moody’s for its fluctuating ratings, calling a recent shift in Kenya’s outlook an implicit admission of past errors.
- Despite Africa’s vast natural resources, only two nations on the continent have investment-grade ratings, according to Ruto.
The big picture
The move signals Africa’s growing push for financial independence and control over its own economic narrative. Leaders argue that an agency built for Africa will better reflect the continent’s true economic standing.
Source: Bloomberg
