The African Peer Review Mechanism (APRM)- an African Union-backed initiative- will launch a continent-wide credit ratings agency in October, a senior adviser at the AU said on Wednesday, as it seeks to tackle high borrowing costs.
Paul Sikazwe, technical adviser on debt to the African Union Commission, said the ratings agency created for Africa will be launched in Mauritius on October 5.
READ ALSO: NCC Calls for African Unity on Global Digital Policy
“This is a sign of progress in our ambition to provide momentum for the reform of the international financial architecture,” he said.
The APRM has been working towards establishing an African ratings agency that would assess the creditworthiness of African sovereigns and provide an alternative to ratings issued by major international agencies such as Fitch, Moody’s and S&P Global.
African leaders have repeatedly criticised the major Western ratings agencies for what they describe as an unfair assessment of the risks associated with lending to African economies.
They have also accused the agencies of being more likely to downgrade African countries during periods of crisis, including conflicts and pandemics.
The global ratings agencies have rejected the criticism, maintaining that their ratings methodologies are applied consistently across countries.
The initiative comes as debt pressures remain a major challenge for African economies, with heavy borrowing, economic mismanagement and external shocks contributing to sovereign defaults in countries including Zambia, Ghana and Ethiopia in recent years.
Sikazwe also disclosed that the African Union was advancing plans for collective action on debt among its 54 member states.
He said the AU planned to inaugurate the African Monetary Institute in Abuja in late October, describing it as a precursor to the establishment of a regional central bank.
The initiatives form part of broader African efforts to strengthen the continent’s financial architecture, reduce borrowing costs and increase African participation in decisions shaping global economic and financial systems.
Reuters
