AU President Macky Sall wants a pan-African financial rating agency

Senegalese Head of State Macky Sall, President of the African Union (AU), calls for the creation of an African financial rating agency in the face of assessments “Sometimes very arbitrary” international agencies that exaggerate the risk of investing in Africa, which increases the cost of credit.

Mr. Sall said “the need to have a pan-African rating agency in the face of unfair, sometimes very arbitrary ratings”, in a speech broadcast on Sunday, May 15, on private radio RFM. He spoke the day before at the Dakar 2022 Economic Conference organized by African economists on the topic of Africa as a main partner.

Interest rates that are too high

“In 2020, while all economies felt the effects of Covid-19, 18 of the 32 African countries rated by at least one of the main rating agencies saw their ratings downgraded. This represents 56% of ratings degraded for African countries against a global average of 31% during the period”.he specified.

“Studies have shown that at least 20% of the qualification criteria for African countries are based on rather subjective cultural or linguistic factors, unrelated to the parameters that measure the stability of an economy”he always estimated.

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One of the consequences is that “The perception of investment risk in Africa is always higher than the real risk. We therefore end up paying more than necessary in insurance premiums, which increases the cost of credit granted to our countries”.. “We continue to pay very high interest rates because of an unfair investment risk assessment system in Africa”he insisted.

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The world with AFP

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