African countries should be active architects of their own financial standing, rather than passive subjects of external assessments, urged Claver Gatete, Executive Secretary of the Economic Commission for Africa (ECA), during a recent high-level dialogue.
Speaking on April 23, 2025, on the margins of the World Bank and International Monetary Fund (IMF) Spring Meetings in Washington D.C., Gatete underscored the urgent need for establishing an African credit rating ecosystem. He stressed that this system must "reflect Africa’s regional realities and complement, rather than merely mimic global agencies."
Gatete argued that such an ecosystem is "critical to reforming the global financial system to better serve the continent's diverse economies." He highlighted a perceived failure of the current system, pointing out the paradox that despite Africa having 54 nations and a combined GDP of $3 trillion, only Botswana and Mauritius hold investment-grade credit ratings. He contended that this lies in a financial system that fails to recognize Africa's unique challenges and opportunities.
The ECA head also drew attention to the challenges facing Africa, noting that while the continent boasts significant potential with dynamic populations, expanding markets, and innovation, many countries are grappling with rising debt vulnerabilities and mounting costs of borrowing. He stated that African nations have been subjected to unfair credit ratings based on limited data and inconsistent criteria, which often leads to higher borrowing costs and constrained access to capital. As an example, he cited African countries paying an average of 12%-14% on Eurobonds, significantly higher than the 3% average for the Euro Area.
To address these issues, Gatete proposed five actionable steps toward establishing a credible and effective credit rating ecosystem tailored to Africa's realities. First, he called for establishing an African credit rating ecosystem that is African-led, African-informed, and globally credible, complementing global agencies while reflecting regional realities.
Second, he stressed strengthening data systems and equipping national statistical offices, credit bureaus, and regional observatories to deliver timely, granular, and context-rich data. Third, he suggested building a robust regulatory framework, inspired by international best practices such as the European model, ensuring transparent and predictable rating actions.
Fourth, he emphasized the need for cross-sector collaboration among sovereign issuers, investors, regulators, and international partners, stating that a well-functioning system must be "greater than the sum of its parts." Fifth, and most critically, he highlighted building Africa’s domestic capacity by empowering African professionals and institutions with the technical expertise for credit analysis based on Africa’s own realities.
The high-level dialogue event was co-hosted by the APRM, UNDP, AfriCatalyst, ACET, and the Open Society Foundations. Gatete emphasized the ECA's commitment to partnering with these organizations to realize this vision.
He concluded by noting the current political climate, including South Africa chairing the G20 and the African Union's status as a permanent member of the G20, presents a unique opportunity for Africa to advocate for reforms that reflect the continent's lived experiences.