Addis Ababa: African policymakers are stepping up calls for greater transparency and fairness in how global credit rating agencies assess sovereign risk, warning that opaque and inconsistent methodologies are costing the continent billions in lost investment and higher borrowing costs.
According to Ethiopian News Agency, at a workshop seeking to promote transparency and build capacity around the sovereign credit rating processes used by major international credit rating agencies, finance officials and economists from across Africa highlighted that the current system fails to reflect the true economic fundamentals and resilience of African economies. Raymond Gilpin, Chief Economist for Africa at the United Nations Development Program (UNDP), stated, ‘This is a space where power is exercised, and when you don’t understand how the power is exercised, you will always be behind.’
The two-day workshop, hosted by the African Peer Review Mechanism (APRM) in partnership with the UN Economic Commission for Africa (ECA), UNDP Africa, and Africatalyst, is taking place just ahead of the inaugural Africa Annual Credit Ratings Conference, which opens on 21 May. Organizers aim to equip governments with tools to navigate, challenge, and engage in the credit rating process while addressing macroeconomic challenges impacting national creditworthiness.
McBride Nkhalamba, Director of Research at APRM, speaking on behalf of APRM CEO Amb. Marie-Antoinette Quarte, emphasized the high stakes involved. ‘The methodologies used by major credit rating agencies are often opaque and insufficiently understood,’ said McBride. ‘This workshop is a timely opportunity to demystify these methodologies, build technical capacity among our government institutions and deepen engagement.’
The event features case studies, simulations, and peer learning sessions involving finance and central bank officials from Ghana, Kenya, Ethiopia, and Zambia. Zuzana Schwidrowski, Director of the Macroeconomics, Finance and Governance Division at ECA, stressed the importance of proactive engagement with rating agencies. She urged African institutions to take charge of the narrative, stating, ‘Africa must own its credit narrative. This workshop is not just a forum for technical discussion; it is a platform for strategic empowerment.’
Credit ratings significantly influence Africa’s access to development finance, investor decisions, and impact on everything from insurance costs to public debt management. Gilpin advised African governments to question assumptions often embedded in credit ratings, emphasizing the need to challenge respectfully yet clearly.
The Africa Annual Credit Ratings Conference, opening on 21 May, is expected to bring together stock exchange executives, rating analysts, economists, and policymakers for a deeper exploration of how ratings can unlock domestic financing and support long-term development on the continent.