President William Ruto has thrown his weight behind the establishment of the African Credit Rating Agency (AFCRA) to challenge global rating agencies accused of inflating borrowing costs for African nations.
Speaking at a High-Level Presidential Breakfast Dialogue on the Establishment of the Africa Credit Rating Agency in Addis Ababa, Ethiopia, Ruto criticized Western-affiliated rating agencies for their negative portrayal of Africa's risk factors.
He argued that these assessments have effectively sidelined the continent from financial opportunities worth an estimated $75 billion (Sh9.7 trillion).
"Africa will no longer accept to be misjudged by the scales of global credit rating agencies that overlook our reality," he said.
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"By relying on flawed models, outdated assumptions, and systemic bias, these agencies have painted an unfair picture of our economies, leading to distorted ratings, exaggerated risks, and unjustifiably high borrowing costs."
The push for AFCRA forms part of broader African Union (AU) reforms spearheaded by President Ruto.
According to the head of state, a homegrown credit rating agency backed by accurate and credible data will better reflect Africa's economic realities and unlock crucial funding for development programs.
Currently, Africa lacks an independent credit rating agency, leaving nations reliant on assessments from global entities such as Moody's, Standard and Poor's, and Fitch Group.
The 2022 acquisition of GCR Ratings, formerly Africa's largest rating agency,by Moody's further cemented the continent's dependence on foreign evaluators.
