Online Reporter
African leaders have endorsed a plan to establish a home-grown credit rating agency in a bid to promote financial independence.
Meeting in Addis Ababa for the 38th African Union Summit, the leaders said the creation of the African Credit Rating Agency (AfCRA) would help counter the bias in existing global credit ratings that has long hampered the continent’s economic growth.
According to the Africa Peer Review Mechanism and the United Nations Development Programme (UNDP), Africa is missing out on $75 billion in opportunities because of biased credit ratings.
Kenya’s President William Ruto, the champion of AU reforms, lamented that despite Africa’s natural wealth, fertile land, large diaspora remittances and vast carbon sinks, credit agencies have downgraded 94 percent of African countries in the last decade, granting investment grade status to only two.
The potential impact of the AfCRA would be profound, he said, citing research showing that a one-level improvement in Africa’s average credit rating would unlock $15,5 billion in additional funding.
“This alone would outstrip Official Development Assistance by 12 percent and meet 80 percent of Africa’s infrastructure needs.
“The opportunity is within our grasp, and we must seize it,” said President Ruto at the High-Level Presidential Dialogue on the Establishment of the Africa Credit Rating Agency.
Other speakers included Presidents Abdelmadjid Tebboune of Algeria, who is also chairperson of the Africa Peer Review Forum of Heads of State and Government, Taye Selassie of Ethiopia and Hakainde Hichilema of Zambia, as well as the Deputy Chairperson of the African Union Commission, Monique Nsanzabaganwa. — The East African.
