As African economies continue to grow, access to accurate, fair, and unbiased credit ratings is essential for their sustainable development and integration into global financial markets. However, African countries often face significant challenges with existing international credit rating agencies, which sometimes lack local insight and assign risk ratings that increase the cost of capital for African entities.
The establishment of an Africa-based credit rating agency was proposed to address these challenges by providing tailored, continent-sensitive credit assessments. This is in line with This initiative is in line with Decision Assembly/AU/Dec.631 (XXVIII) adopted by the Assembly of Heads of State and Government of the African Union at its 28th Ordinary Session in Addis Ababa, Ethiopia. The decision mandates the African Peer review Mechanism (APRM), a specialised governance entity of the African Union, to provide support to AU Member States in the field of credit rating. This agency would aim to promote transparency, enhance investment opportunities, and reduce dependency on external agencies by delivering ratings that reflect Africa’s unique economic landscape.