Africa-Press – South-Africa. A senior advisor in the African Union announced that the African Peer Review Mechanism (APRM), an initiative supported by the African Union, will launch a continent-wide credit rating agency in October to address rising borrowing costs.
Paul Sikazwe, the technical advisor for debt affairs at the African Union Commission, stated that the newly established rating agency for Africa will be launched in Mauritius on October 5.
Sikazwe added during a conference on debt and development in the Kenyan capital, hosted by the economic issues group “Afro Dad”: “This is a sign of progress in our efforts to give momentum to reforming the international financial system.”
The African Peer Review Mechanism (APRM) has been working for years to establish an agency that assesses the creditworthiness of African countries, as governments seek alternatives to the ratings of major global agencies such as Fitch, Moody’s, and Standard & Poor’s.
African leaders have long stated that the three major Western rating agencies do not fairly assess the lending risks of African countries. They have also accused these agencies of hastily downgrading the ratings of African economies during crises such as conflicts and epidemics.
The agencies have rejected these accusations, asserting that their ratings follow the same standards worldwide. Debt issues in Africa have become more prominent in recent years as excessive borrowing, poor economic management, and external shocks have led countries like Zambia, Ghana, and Ethiopia to default on their sovereign debts.
Sikazwe noted that the African Union is also moving forward with efforts for joint action on debt among its 54 member states, including the opening of the African Monetary Institute in Abuja in late October, which is designed to serve as a precursor to a regional central bank.
