The Institute for Development Studies and ULI Africa on Thursday 13^th March 2025 held a timely seminar themed “Rating ourselves: What’s the future of Africa Credit Rating Agency?”.

The speaker was Theo Acheampong, Associate lecturer and Honorary Research Fellow at the Department of Economics, University of Aberdeen, Scotland.

The discussants included Prof. Peter Muriu, Associate Professor of Finance and Economics, UoN. Prof. Muriu holds PhD in Financial Economics from University of Birmingham, United Kingdom. He is an Associate Professor at the Department of Economics & Development Studies, University of Nairobi. He is also an external examiner, University of Ghana and an external reviewer for Oxford Development Studies, Financial Regulation and Compliance, and Transnational Corporations Review Journals. He has published widely on financial inclusion; climate finance; banking and capital markets. As a policy analyst, he has been engaged by several African governments on matters of financial inclusion, banking and institutional reforms.

Mohamed Salat, the second discussant, is a Public Financial Management Expert, at The African Capacity Building Foundation (ACBF). Mohamed has over 14 years’ experience working with governments, civil society, think tanks, and regional institutions in advancing transparency and accountability in PFM systems across Africa. At the ACBF he supports the Economic Social Governance Unit to promote evidence-driven policy making, enhance domestic resource mobilization and strengthening of public financial management reforms in Africa. He has previously served in the public sector as a Senior Economist, Head of Budget and Expenditure Management, and Chief Officer.

The session was moderated by Dr. Radha Upadhyaya, a Research Fellow at IDS, University of Nairobi.

The Abstract reads:

The Big 3 global credit rating agencies—namely, Fitch, Moody's, Standards & Poors—are key players in determining the cost at which global governments, including from Africa, can borrow funds from international capital markets (ICMs). Their sovereign risk assessments of a country’s ability to repay its debt and assign credit ratings (e.g., AAA, BBB, BB+, etc.), are key to the pricing of these loans. Higher-rated countries borrow at lower interest rates, while lower-rated ones face higher costs due to perceived risks. However, the power wielded by these agencies has become increasingly controversial, with many facing intense scrutiny from African policymakers. Accusations of an African bias have inflated borrowing costs or even shut countries out of ICMs and led to growing calls for a continental alternative. In the past few years, countries like Ghana, Zambia, and Ethiopia have faced credit rating downgrades that impacted their ability to refinance debt affordably. In response to these perceived biases, the Africa Credit Rating Agency (AfCRA), which is under the auspices of the African Union (AU), has been proposed as a continental response to providing independent, credible, and African-owned credit ratings, thus asserting Africa’s position on global financial governance architecture. This talk will discuss the what, how, and controversy surrounding the country and sovereign risk assessment. It will also discuss the future AfCRA, including institutional arrangements to ensure credibility and independence. With many African economies heavily reliant on external financing, the stakes could not be higher.

To watch the seminar recording, click HERE. https://youtu.be/lyQIrUIsbzc