African leaders have endorsed the establishment of the African Credit Rating Agency (AfCRA) to promote financial independence and address long-standing concerns over biased global credit ratings.
At the 38th African Union Summit in Addis Ababa on Friday, heads of state and government agreed that AfCRA would provide fairer assessments of African economies, countering the systemic disadvantages imposed by international credit rating agencies.
According to the Africa Peer Review Mechanism and the United Nations Development Programme (UNDP), Africa loses an estimated $75 billion in economic opportunities annually due to these biases.
Kenyan President William Ruto, a key advocate for AU financial reforms, highlighted that global credit agencies have issued 94 per cent of Africa’s downgrades over the past decade, granting investment-grade status to only two nations.
The president noted that even a one-level improvement in Africa’s average credit rating could unlock $15.5 billion in additional funding, covering 80 per cent of the continent’s infrastructure needs.
Speaking at a high-level Presidential Dialogue on AfCRA, President Ruto declared that Africa could no longer allow its economies to be misjudged by flawed models and outdated assumptions.
Other key speakers included Algerian President Abdelmadjid Tebboune, Ethiopian President Taye Selassie, Zambian President Hakainde Hichilema, and African Union Commission Deputy Chairperson Monique Nsanzabaganwa.
Scheduled for launch in June, AfCRA aims to reduce reliance on Moody’s, Fitch, and Standard & Poor’s, providing an African-driven credit rating system based on the continent’s unique economic realities.
Leaders emphasised that the agency would not compete with existing rating bodies but rather complement them with a more balanced perspective.
