Speech by Zuzana Brixiova Schwidrowski
Director, Macroeconomics, Finance and Governance Division, ECA
Africa Credit Rating Conference 2025 – Cape Town
Opening Session: Unlocking Domestic Financing through Improving Credit Ratings
Wednesday 21 May 2025 at 9:00 Cape Town
Distinguished colleagues, partners, and friends,
It is a great pleasure to join you this morning at this timely and important Africa Credit Rating Conference. Let me begin by expressing my appreciation to the APRM, UNDP Africa, and AfriCatalyst for organizing this dialogue. We meet here in Cape Town with a shared purpose: to unlock the full potential of domestic financing in Africa through the strategic use and reform of sovereign credit ratings.
Today, only two African countries hold investment-grade ratings. This statistic alone underscores the severity of the sovereign debt and financing challenges we face. But it also points to an opportunity to make an urgent call for collective action to rewrite the narrative.
Across the continent, many African countries face persistent challenges in accessing affordable capital to finance their development priorities. A key constraint is the unfavourable credit ratings that often do not reflect the true macroeconomic fundamentals or the depth of ongoing structural reforms. There is a widespread and growing concern among policymakers, economists, and development partners that the methodologies employed by major global credit rating agencies may not adequately consider Africa’s unique development contexts. These include issues of data quality, structural biases, limited country coverage, and lagged assessments, which in turn lead to elevated risk premiums, discourage long-term investments, and shrink the fiscal space for critical public investment. As such, improving sovereign and sub-sovereign credit ratings is not just about better access to capital markets, it is about building confidence, promoting fiscal responsibility, and unlocking the vast potential of domestic resource mobilization, which remains underleveraged across the continent.
In response to these challenges, a growing coalition of institutions and stakeholders including regional bodies, central banks, finance ministries, and think tanks are working to promote reform on multiple fronts. This includes strengthening domestic economic fundamentals through prudent fiscal management, enhanced debt transparency, and strategic revenue mobilization, including widening the tax base and reducing illicit financial flows. Equally important are efforts to develop domestic credit rating capabilities that are regionally embedded and contextually attuned to African economies. These efforts seek to challenge existing narratives, bringing balance and equity to sovereign credit assessments. The development of integrated capital markets, enhanced financial literacy, and digital public financial management systems are also pivotal. These tools can reduce costs, improve financial inclusion, and facilitate the growth of long-term savings instruments that are essential for building resilient, domestically funded development.
At the Economic Commission for Africa (ECA), we have placed this issue at the core of our macroeconomic and governance agenda. ECA continues to work closely with member States to deepen the institutional foundations necessary for better credit performance. This includes providing technical support to improve debt data management and fiscal risk frameworks, enhancing the credibility of national statistics, and advising on legal and institutional reforms that foster transparency and governance. We also support countries in issuing local currency bonds and developing their domestic capital markets, thereby reducing vulnerability to external shocks. Our aim is to help African governments take ownership of their financial narratives by equipping them with the tools and capacity to engage with credit rating agencies on fairer and more accurate terms. Ultimately, unlocking domestic financing through improved credit ratings is a structural transformation agenda, a bold step toward economic sovereignty, investment-led growth, and the realization of Agenda 2063. We must seize this moment, collectively and decisively, to reframe Africa’s credit story and unlock the full power of its domestic capital for inclusive development.
At ECA, we view credit ratings not just as a technical assessment of repayment risk, but as a development enabler. We are proud to be working with partner institutions to support African countries in navigating this complex space to improve transparency, address rating biases, and help governments leverage ratings to attract long-term, affordable capital.
We know the costs of low credit ratings are real: elevated borrowing costs, limited access to global capital markets, and constrained fiscal space. But we also know that the path to stronger ratings is within reach through better data, sound macroeconomic frameworks, and stronger institutions.
More importantly, we must also link ratings reform to Africa’s broader financing architecture. Stronger credit ratings will multiply the impact of these efforts, lowering the cost of capital and unlocking pension, insurance, and sovereign wealth fund investment.
Boosting sovereign credit ratings is not merely a technical objective, it is a strategic lever for enhancing Africa’s overall creditworthiness and investment appeal. Stronger ratings serve as a signal of economic stability, sound governance, and fiscal responsibility, which are precisely the qualities sought by both international and domestic private investors. For global investors, a higher rating reduces perceived risk and unlocks access to larger pools of institutional capital including pension funds, insurance companies, and sovereign wealth funds many of which are bound by investment mandates that require investment-grade ratings. For domestic investors, improved ratings instill confidence in national markets and encourage long-term participation in government bonds, infrastructure projects, and public-private partnerships. This virtuous cycle of improved ratings and increased investor interest not only lowers the cost of borrowing, but also broadens the base of available financing, making development funding more predictable, diversified, and sustainable. In this way, credit rating improvements become a catalyst for deeper capital market development and greater economic self-reliance across the continent.
Let me be clear: Africa’s development should not be held hostage by narrow perceptions of risk. Our continent has demonstrated resilience, innovation, and reform ambition. The world needs a credit rating system that recognizes this progress and supports our member states in financing the African Union’s Agenda 2063 and the Sustainable Development Goals.
Let me close by saying: this conference is not just about diagnosis, it’s about action. Together, we can define concrete next steps: from capacity-building and data harmonization to reforms in credit assessment frameworks. ECA stands ready to work with all of you governments, rating agencies, investors, and development partners to seize this moment.
Let us build a new cycle of credible, positive ratings anchored in African leadership and supported by a fair, transparent global system.
Thank you.