In furtherance of the African leaders’ sustained efforts to provide an alternative perspective to global rating agencies’ views on economic performances of Sub-Saharan African (SSA) nations, the African Union (AU) has launched the African Credit Rating Agency (AfCRA), an initiative which was approved by the Union in 2017
The agency, which was designed to tell “Africa’s own economic performance based on the peculiar assessment parameters of the various economies in the continent, was launched on Wednesday and broadcast live on X by the African Peer Review Mechanism (APRM), an organ of the AU that coordinated the operationalisation of AfCRA.
Speaking on the initiative, the President of Uganda and Chairperson of the APR Committee of Focal Points, President Yoweri Museveni, maintained that SSA did not lack economic potential but contending with challenges including inadequate resource mobilisation and underdevelopment of human resources, among others.
The Ugandan President, who was represented at the event by the country’s Minister of State for Finance, Planning and Economic Development, Hon. Amos Lugoloobi, maintained that Africa needed adequate and affordable capital for sustainable growth, noting that the sustained borrowing of African countries at high interest rates from global partners are influenced by global rating agencies.
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He explained that Africa should not avoid scrutiny but needed accurate assessments and a proper understanding of the context in which African countries are developing.
In his remarks, the Chairperson of the African Union Commission, Mahmoud Ali Youssouf, explained that AfCRA was created to objectively assess the risks facing African economies while remaining independent for the purposes of its credibility.
This is even as the Chief Executive Officer of the African Peer Review Mechanism (APRM), H.E. Ambassador Marie-Antoinette Rose Quatre, said that the rating agency emerged from a perception of Africa that did not reflect the true size of the continent’s economy, stressing that “Africa could no longer postpone the institutions required to tell its own economic story with rigour and credibility.”
She clarified that the agency was not created merely to compete with existing global credit rating agencies but to offer assessments that are rigorously independent, materially unbiased, credible and firmly rooted in Africa’s true measure.”
Commenting on the launch of the AfCRA, President and Chairman of Afreximbank, Dr. George Elombi, who was represented by Senior Executive Vice President (Finance, Administration and Banking Services), Denys Denya, said the new agency would help correct a distorted perception of the African economic operating environment
Elombi quipped: “Why should Dangote Group, which is rapidly expanding its footprint across Africa, be confined by Nigeria’s credit ratings? Or why should major banks in South Africa, Egypt, Morocco and elsewhere, which have a presence in many jurisdictions in Africa, be limited by national ratings?”
The banker stressed that AfCRA must set a new benchmark for Africa, maintain its independence and be wholly owned by Africans.
It would be recalled that the AU had initially planned to launch the AfCRA in September last year with a view to providing alternative African perspective to what the dominant global rating agencies, particularly Fitch Ratings, Moody’s Ratings and S&P Global Ratings, had been providing as performance of the economies in the continent over the years.
