In a groundbreaking move aimed at addressing perceived biases in global credit rating systems, President Bola Tinubu has thrown his weight behind the establishment of an African Credit Rating Agency (ACRA). The initiative, unveiled during the African Union (AU) Summit in Addis Ababa, Ethiopia, seeks to provide more equitable and context-sensitive credit assessments for African nations, which have long criticized existing agencies for undervaluing their economic potential.
Thank you for reading this post, don't forget to subscribe!Naija247news gathered that the proposed agency is designed to offer an alternative to the “Big Three” credit rating firms—Moody’s, Standard & Poor’s, and Fitch—whose assessments often influence investment decisions and borrowing costs for African countries. According to Naija247news, President Tinubu argued that the current system disproportionately penalizes African economies, making it harder for them to access affordable credit and attract foreign investment.
“The existing credit rating framework does not fully capture the unique dynamics and potential of African economies,” President Tinubu stated during his address. “An African-led credit rating agency will ensure fairer, more accurate assessments that reflect our realities and aspirations.”
Naija247news understands that the proposal has already gained traction among AU member states, with several leaders expressing support for the initiative. A source within the AU revealed that the agency would be headquartered in a yet-to-be-determined African financial hub and would operate independently, with a mandate to provide transparent and credible ratings.
According to Naija247news, the establishment of ACRA is expected to address long-standing grievances about the methodologies used by international rating agencies, which critics say often overlook Africa’s growth potential and resilience. For instance, despite significant economic reforms and improved governance in many African countries, ratings have remained disproportionately low, leading to higher borrowing costs.
Naija247news reports that the agency will also focus on educating African governments and financial institutions on best practices to improve their creditworthiness. “This is not just about challenging the status quo but also about empowering African nations to take control of their economic narratives,” said Dr. Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, who endorsed the initiative.
The proposal is set to be discussed further at the next AU Assembly meeting, where member states will deliberate on its structure, funding, and operational framework. If approved, ACRA could become operational within two years.
President Tinubu’s endorsement of the African Credit Rating Agency has been hailed as a bold step toward economic sovereignty. As the continent moves closer to realizing this vision, the initiative could redefine how Africa is perceived in the global financial landscape, unlocking new opportunities for growth and development.
