A new African credit rating agency will be established by the African Union (AU) to address concerns of member-countries.
Reuters reports Misheck Mutize, the AU’s lead expert for national support on rating agencies, as saying that the grades provided to the continent’s nations are unjust.
Misheck Mutize said the organisation would be based on the continent and would give context to the data investors analyse when determining whether to buy African bonds or lend privately to countries.
The AU, and leaders of member nations from Ghana, Senegal and Zambia, allege that the “big three” ratings agencies Moody’s, Fitch and S&P Global Ratings – do not fairly assess the risk of lending to African countries.
The three rating agencies all assert that their ratings are consistent across all continents and deny any bias.
Over the summer, AU finance ministers passed a resolution to endorse the plan for the new agency, an effort spearheaded by the African Peer Review Mechanism (APRM), a branch of the AU formed last year to improve governance across the continent.
Writing by Hadiza Abdulrahman; Editing by Adeniyi Bakare and Tony Okerafor