Africa weighs a homegrown credit rating agency amid investor scepticism
Current credit ratings may disadvantage the African continent, according to an Institute for Security Studies (ISS) analysis. Yet the idea of an African rating agency risks being seen as the continent "marking its own homework", raising questions over credibility.
Credit ratings, which shape the borrowing costs of African countries, have long been a subject of debate across the continent. According to an Institute for Security Studies (ISS) analysis, the current rating system may place African nations at a disadvantage.
One proposed remedy is the creation of a homegrown African credit rating agency. But the analysis cautions that such a body risks being perceived as the continent "marking its own homework", which could raise doubts among investors.
The debate goes directly to the continent's access to international capital markets and its borrowing terms. How an African agency would demonstrate its independence and credibility is likely to be decisive for whether the initiative succeeds.
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