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Ratings plan gets serious

An AU official says a credit agency catering to the needs of the continent’s sovereign borrowers will be ready by next year

An Africa credit rating agency will start work in 2025, a senior African Union official has told reporters.

The new body – which had initially been expected to open its doors in late 2024 – will not be an institution linked to the African Union but will be independent and professional, said Development, Trade, Tourism, Industry and Minerals Commissioner Albert Muchanga. The plan for an African rating agency has been kicking around for several years and the project has the support of the African Development Bank, African Export-Import Bank and the United Nations Development Programme (AC Vol 65 No 12, Adesina urges the bank to go private).

The project is at its ‘operationalisation’ phase, said Muchanga, with officials now tasked with ‘coming up with the final work plan to ensure that we are able to roll it out,’ he said.

The main reason for trying to set up a new body is that the three dominant ratings agencies: Moody’s, Fitch, and S&P Global – do not fairly assess the risk of lending to African countries and that significant savings could be made if credit ratings were based on less subjective assessments (Dispatches 16/4/24, Africa bids to enter the ratings war).

There are still doubts about the new agency’s credibility and the low level of funding – around US$1 million – that has been allocated to it for 2025.



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