Introduction
African Island States operate in a unique economic and environmental context that directly shapes their ability to mobilize development and climate finance. Small domestic markets, geographic isolation, and vulnerability to external shocks create structural challenges but also generate opportunities for innovation in financing and economic diversification. In global capital markets, sovereign credit ratings play a decisive role in determining countries’ cost of borrowing, investor confidence, and access to sustainable finance instruments such as climate bonds, blue bonds, and resilience-linked financing.
The African Islands States Coordination Committee (AISCC) comprises nine member countries1, with the Kingdom of Morocco participating as a founding partner. This collective platform provides a unique opportunity to coordinate on climate resilience, blue-economy development, and financial innovation. As the international community increasingly recognizes the disproportionate climate burden faced by small island states, there is growing momentum to integrate climate vulnerability, resilience-building investments, and blue-economy potential into assessments of creditworthiness. For African Island States, strengthening the link between ratings, resource mobilization, and climate/blue-economy strategy is essential for expanding fiscal space, enhancing resilience, and supporting long-term development agendas.
Background
African Island States face persistent financing constraints driven by structural factors such as limited economic diversification, high exposure to global price fluctuations, and reliance on imports. These conditions are further compounded by the impacts of climate change, which intensify fiscal pressures and disrupt macroeconomic stability and often weigh negatively on sovereign credit ratings. As a result, access to long-term and affordable financing remains constrained for many island economies.
The current rating landscape across the African Island States further illustrates the diversity of economic conditions and the differentiated challenges faced within the AISCC constituency. Within the group, four island states remain unrated, namely Comoros, Equatorial Guinea, Guinea-Bissau, São Tomé and Príncipe, which limits their visibility in international capital markets and restricts access to private financing. In contrast, five AISCC States hold sovereign credit ratings. Mauritius stands out as the only investment-grade sovereign among the island states, benefiting from stronger institutions, economic diversification, and sound fiscal management. Seychelles is rated at speculative grade, reflecting improved economic governance but ongoing vulnerability to external shocks. Meanwhile, Cabo Verde, Madagascar, and Zanzibar (Tanzania) fall within the highly speculative rating category, reflecting elevated credit risk, limited fiscal buffers, and higher borrowing costs.
Expected Outcomes
By the end of the workshop, participants are expected to:
- Have a clearer understanding of rating agency methodologies and how they apply to island economies.
- Strengthen national capacity to prepare data and communicate with rating agencies.
- Gain insights into integrating climate and blue economy considerations into macro-fiscal strategies.
- Identify actionable steps to improve creditworthiness and resource mobilization.
- Develop a roadmap for enhancing engagement between Ministries of Finance, Ministries of Environment, and Central Banks.
- Produce a summary report outlining recommendations and next steps for the AISCC.
Participants
Each Island State is expected to nominate three participants from:
- The Ministry of Finance
- The Ministry of Environment.
- The Central Bank
- The National Stock Exchange
Contact information
Further information about the event may be obtained from:
Ms. Sonia Essobmadje
Chief, Finance and Domestic Resource Mobilization Section
Macroeconomics, Finance, Governance, and Planning Division
United Nations Economic Commission for Africa
Email: sonia.essobmadje@un.org
Documents