Skip to content

[wpdreams_ajaxsearchlite]

June 12, 2024
< class="premium-post-ticker__post-title"> Rescue Effort Saves Trapped Miners at Redwing Mine in Zimbabwe
African Union Plans To Launch New Credit Rating Agency In 2024

Copyright claim/Content removal? Learn more

African Union Plans to Launch New Credit Rating Agency in 2024

The African Union (AU) is gearing up to establish a new African credit rating agency in 2024, aimed at addressing concerns that ratings assigned to African countries are often perceived as unfair. The agency will be headquartered in Africa and will provide its own evaluations of the lending risks associated with African nations, offering additional context for investors considering the purchase of African bonds or private lending to these countries. Misheck Mutize, the lead expert for country support on rating agencies within the African Union, revealed that there is already significant interest from the private sector to support the agency’s implementation.

Critics within the AU, as well as leaders of member nations, including Ghana, Senegal, and Zambia, argue that the “big three” global ratings agencies—Moody’s, Fitch, and S&P Global Ratings—do not consistently and fairly assess the risk of lending to African nations. They also claim that these agencies are quicker to downgrade African countries during crises, such as the COVID-19 pandemic. In response, the AU aims to create a credit rating agency that will offer a fresh perspective.

The AU’s goal with this new agency is not to replace the major global agencies but to increase the diversity of opinions available to investors. They believe that the big three often follow the assessments of smaller ratings agencies, which may have a better understanding of domestic dynamics. The plan for this new agency received endorsement from AU finance ministers over the summer and is being spearheaded by the African Peer Review Mechanism (APRM), a branch of the AU focused on improving governance across the continent. The AU’s executive council is expected to formally adopt the resolution in February.

The agency will be self-funded and overseen by the AU, with significant private sector involvement. A pitch book is currently being developed to attract potential investors and collaborators, although specific private sector and multilateral organizations that will run the agency have not yet been announced. Investors have expressed interest in the initiative, as it promises to provide them with valuable information for decision-making.

While Moody’s, Fitch, and S&P Global Ratings have not immediately responded to these developments, they have consistently maintained that their ratings follow the same criteria consistently across regions and do not exhibit bias. Ravi Bhatia, S&P’s lead analyst for sovereign ratings, recently stated that the agency applies its criteria consistently across all regions.

 

Source: Reuters

Did you like what you read?

Share on Social

Add me to your mailing list


    [mailpoetsignup* mailpoetsignup-693 list:3 default:on "I consent to privacy policy"]

    No comment yet, add your voice below!


    Add a Comment

    Your email address will not be published. Required fields are marked *

    More News

    Flights To Belfast City Airport Cancelled As Heavy Fog Disrupts Uk Airports

    Flights to Belfast City Airport Cancelled as Heavy Fog Disrupts UK Airports

    In a weather-related incident on Sunday night, Aer Lingus flights
    Rescue Effort Saves Trapped Miners At Redwing Mine In Zimbabwe

    Rescue Effort Saves Trapped Miners at Redwing Mine in Zimbabwe

    In a remarkable display of bravery and perseverance, rescuers successfully
    Nigeria Signs Mou With Saudi Arabia For Smooth Conduct Of 2024 Hajj

    Nigeria Signs MoU with Saudi Arabia for Smooth Conduct of 2024 Hajj

    In a significant development, Nigeria has signed a Memorandum of

    £10, £20 or more.

    Help to keep Jambo! Radio up and running

    Connect with Jambo! Radio on Social

    Jambo! Radio supports public opinions

    Have a news column to share?

    Artistes Shine on Jambo! Radio

    Pexels Antoni Shkraba Production 8412278 Removebg Preview2

    Discover new music, or promote your own songs.

    Look Good, Feel Good with Jambo! Radio Merch

    Support the growth of our platform by purchasing our merch.