Africa’s first review report for sovereign credit assessments launched UNECA The African Peer Review Mechanism (APRM), the Economic Commission for Africa (ECA) and the African Development Bank (AfDB) on Thursday released the first African Sovereign Credit Rating Review Report which assesses trends in the credit ratings of African countries during the first half of 2020. Read more »

Addis Ababa – The African Peer Review Mechanism (APRM), the Economic Commission for Africa (ECA) and the African Development Bank (AfDB) on Thursday virtually launched the first African Sovereign Credit Rating Review Report assessing trends in African credit ratings. countries during the first half of 2020.

The report examines the risk drivers that led to various downgrades in light of the new coronavirus (COVID-19); evaluate its impact on government costs; examines the consistency, objectivity and transparency of the assessment process; and make recommendations to African countries on how to avoid negative rating actions and improve future ratings.

Many African countries have recently complained that credit rating agencies, which play a crucial role in the international financial sphere, are unfairly downgrading them. Member countries are concerned about the impact of poor ratings by the three leading international credit rating agencies – Moody’s, Standard & Poor’s and Fitch.

The ECA says policies are needed to ensure that Africa meets its debt obligations in a consistent, sustainable and transparent manner to jeopardize credit ratings, adding that it is time to redefine a new financial architecture around Africa’s financial markets deepen in a manner consistent with Agenda 2063 and Agenda 2030.

The two organizations argue that while the issue of ratings is real, there is also an urgent need for African countries to be transparent in the contracts they enter into to avoid negative ratings.

The ECA remains committed to continuing to work with the APRM, a specialized entity of the African Union, the African Union Commission (AUC) and others, on the issue of credit ratings and a new financial architecture for Africa. to redefine.

Speakers at the launch of the report, including ECA, APRM, IMF, representatives of the Commission of the African Union, praised the report which, according to them, will help policy makers in Africa to become more effectively involved in the review processes through diverse skilled liaison teams of experts to engage rating agencies during appraisal reviews; and develop and strengthen legislative frameworks for rating agencies to be registered, inter alia, in their jurisdiction to provide rating services.

The African Sovereign Credit Rating Review Report aims to provide African countries and investors with relevant analysis of the opinions issued by international sovereign credit bureaus. The report contains trends, determinants, interpretation of opinions and policy recommendations on sovereign credit ratings.

Eleven countries have been downgraded to the peak of COVID-19. These are Angola (twice), Botswana, Cameroon, Cape Verde, Ethiopia, Gabon, Nigeria (twice), Seychelles, Tunisia, South Africa (3 times) and Zambia (3 times). Twelve countries have had negative changes in their outlook for sovereign ratings, indicating the risk that they will be downgraded in the short to medium term.


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