Only 23 of 53 African countries get major credit ratings – AfDB
Thirty African countries are currently not rated by major credit rating agencies such as the Standard and Poor’s, Moody’s and Fitch, the African Development Bank (AfDB) said today May 30, 2012.
This is because these unrated countries do not collaborate with the rating agencies to be rated and this has somehow affected the countries’ chances to access international financial markets.
“Currently, only 23 African countries out of 53, are rated by major Rating agencies covering the continent, namely; Standard & Poor’s, Moody’s and Fitch,” said AfDB’s Finance and risks management director, Kodeidja Diallo at a seminar ahead of AfDB’s Governors Meeting in Tanzania.
Diallo stated that the AfDB Group is working in synergy with the rating agencies to encourage African countries to be rated in order to enable them maximize their ability to mobilize resources on capital markets.
The Bank is holding series of meetings to review the sovereign rating methodologies and benefits for African countries to get rated for enhanced resources mobilization on international capital markets.
“This is an ongoing initiative of the Bank, to support the resource mobilization efforts of countries and leverage Bank resources allocated to its regional member countries,” the AfDB said.
Kodeidja Diallo explained that it is a requirement for African countries to be well rated if they would raise funds at competitive rates.
By Ekow Quandzie
It is critically important that countries seek an international credit rating to access international markets, rather than routinely turning to the commercial banking sector for funding. To obtain such a credit rating, of course, requires governmental accounting transparency, fiscal discipline,independent fiscal management (audit), reduced corruption, and good governance. The absence of so many African countries having international credit ratings speaks strongly about the quality of fiscal management troughout the Continent.