Senegal: Calls for Africa to have own credit rating agency made, as conference participants allege bias

Following the continued trend of international credit rating agencies perceiving the African markets to be risky, calls have arisen to establish a Pan African Credit Rating Agency that will be objective and sensitive to pertinent issues surrounding the continent.

Concerns on the continued downgrading of African economies and markets by international credit rating agencies had worried some participants at the third African Conference on Debt and Development (AfCoDD III) taking place in Senegal.

One of the speakers at the conference, Gorden Moyo Director of the Public Policy and Research Institute of Zimbabwe (PPRIZ), advocated for the establishment of a Pan African Credit Ration Agency that was objective and sensitive of African circumstances.

Moyo in an interview on the side-lines of the AfCoDD conference in Senegal on Thursday accused international credit ratings of deliberately downgrading African countries to favour other economies.

According to Moyo, these internal credit rating agencies were biased against African markets and against Africa in general.

“Because of that I do not see any way of reforming those situations, you cannot talk of reforming the international credit rating agencies because those are private companies so we cannot talk about reforming them but we can deny them our markets.

“As we go out there all the time, the challenges we face is that perception is that the market in Africa is a risk market, to do business in Africa is so terrible. That is the perception created,” he said.

Moyo, however, wondered why African bonds are still bought by international investors even after the countries were being downgraded by international agencies.

He pointed out that bonds in most countries, such as Zambia, were being oversubscribed despite the negative perception created by international agencies.

“We still have oversubscription in some other countries, at one point even Zambia had a lot of that simply because it is lucrative, and the interests are very high because of the negative perception. They are charging high interests so they are getting a lot of money from Africa. It is meant to profiteer the buyers of our bonds,” Moyo said.

In a separate interview can Forum and Network on Debt and Development (AFRODAD) Executive Directo, Jason Braganza, said the high risk perception of the continent was effecting the cost of financing for development

Braganza said this put pressure on African countries, thereby landing them in debt traps.

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