With New Credit Rating Agency, Africa Pushes for Fairer Risk Assessment, Lower Borrowing Costs
• Continent pays more to borrow, says WAIFEM DG
• Experts demand transparent ratings, stronger data, joint ownership of debt analysis
• IMF warns rising debt service crowding out development spending
• W’Bank mobilises $112bn in private capital, says 59m Africans gain electricity access
Nume Ekeghe in Bangkok, Thailand
African policymakers and financial experts have called for a fairer assessment of the continent’s economies, stronger debt management capacity and greater transparency in credit rating methodologies, warning that persistent risk premiums continue to raise borrowing costs and constrain development financing.
The call comes as Africa seeks to strengthen its voice in global credit assessments following the launch of the Africa Credit Rating Agency (AfCRA) in Mauritius this month, against the backdrop of mounting debt pressures, a projected global shortfall of 800 million jobs and growing demands for infrastructure and social investment.
Also yesterday, the International Monetary Fund (IMF) warned that rising debt-service burdens were squeezing development spending, while the World Bank Group highlighted the challenge of creating jobs for a rapidly growing global workforce, with a projected shortfall of 800 million jobs over the next 10 to 15 years.
Speaking at the 2026 IMF/World Bank Annual Meetings in Bangkok, IMF Managing Director Kristalina Georgieva warned that high and rising interest burdens, particularly in low-income countries, were leaving governments with less room to finance development.
On his part, World Bank Group President Ajay Banga, stressed the need to mobilise private capital, expand infrastructure and create jobs, disclosing that the institution mobilised $112 billion in private capital last year.
The new continental credit rating agency is expected to complement existing international credit rating agencies by incorporating more African data, expertise and perspectives into assessments of the continent’s economies. However, stakeholders say its success will depend on its independence, credible methodologies, reliable economic data and acceptance by investors.
Speaking at a panel discussion on ‘The Debt Sustainability Framework, Credit Ratings and Africa’s Risk Premium,’ held on the sidelines of the IMF/World Bank Annual Meetings in Bangkok, Thailand, the Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Dr. Baba Musa, said African countries had spent decades calling for their economic realities to be assessed accurately and proportionately.
He said African countries pay more to borrow than comparable economies in other regions, arguing that prevailing perceptions and external interpretations of the continent’s economic realities often placed it at a disadvantage.
“For a rating agency, the methodology should be comparable with international standards. However, what African countries have been asking for over the past 20 years is that they should be assessed accurately, their risks communicated proportionately, and their economies evaluated fairly,” Musa said.
He stressed that the demand for fairer assessments was not a call for preferential treatment or lower standards, but for methodologies that adequately reflected the diversity, resources and economic circumstances of African countries.
“Africa’s voice should be heard and the continent should be assessed fairly, just like any other region,” he said, adding that AfCRA’s success would depend on transparency, credible methodologies and its ability to capture the actual realities of African economies.
The cost of Africa’s risk premium remains substantial. The Deputy Executive Secretary and Chief Economist of the United Nations Economic Commission for Africa (ECA), Dr. Hanan Morsy, estimated that persistent risk premiums cost the continent approximately $75 billion annually in excess interest payments.
The additional borrowing costs come at a time when governments face mounting pressure to finance development, improve living standards and create jobs for rapidly growing populations.
Morsy said African countries must also take greater responsibility for presenting evidence-based accounts of their economies rather than relying on others to make their case.
“If you do not advocate for yourself, no one will. This applies to individuals as well as countries. You must make your case and ensure that it is not based on words alone but backed by evidence,” she said.
She emphasised the need for reliable data to limit the room for discretion in credit assessments, warning that countries must be prepared to provide the evidence needed to support their economic outlooks.
Morsy added that international institutions had helped countries without previous credit ratings obtain them and subsequently improve their ratings, while also supporting countries seeking investment-grade status.
The launch of AfCRA is expected to broaden the information available to investors and provide additional perspectives on African economies, reform programmes and growth prospects. However, stakeholders have cautioned that the agency’s establishment alone will not automatically reduce borrowing costs without stronger economic fundamentals and institutional credibility.
Beyond credit ratings, African policymakers called for reforms to debt sustainability assessments to ensure that the models and assumptions used by international financial institutions adequately reflect national economic conditions.
Musa welcomed aspects of the revised Debt Sustainability Framework (DSF), noting that distinguishing between external debt distress, overall public debt distress and actual debt unsustainability represented progress in assessing African countries’ debt positions.
He explained that countries experiencing liquidity pressures should not necessarily be assessed in the same way as those facing solvency problems. Indicators such as gross financing needs relative to gross domestic product and government revenue, he said, could provide a more nuanced picture of countries’ debt positions.
However, he called for African governments to have a greater role in debt sustainability assessments, arguing that countries should jointly determine the assumptions and projections used to evaluate their debt positions.
Musa warned against situations in which the IMF and World Bank relied on their own projections while African governments maintained different estimates of their economic outlooks.
Former Finance Minister of Niger Republic, Hon. Ahmat Jidoud, said the revision of the DSF should not mark the end of efforts to improve debt assessment across the continent.
He called on the IMF and World Bank to engage more closely with African countries, explain the models and assumptions underpinning the framework, and provide training to officials in finance ministries and other relevant institutions.
Jidoud also raised concerns about the treatment of domestic debt under the revised framework, particularly its implications for regional economic communities such as the West African Economic and Monetary Union and the Central African Economic and Monetary Community.
For the Chief Executive Officer of the African Legal Support Facility (ALSF), Dr. Olivier Pognon, stronger coordination and knowledge-sharing among African institutions are essential to improving the continent’s engagement with credit rating agencies and strengthening debt management.
Pognon said the ALSF was developing a capacity-building platform expected to be launched in Abidjan, Côte d’Ivoire, at the end of November. The initiative would support debt management offices and officials involved in public borrowing and major project negotiations.
IMF Warns Debt Burdens Squeezing Development
The debate over Africa’s borrowing costs comes as the IMF warns that rising public debt and interest payments are limiting governments’ ability to finance development and respond to economic shocks.
Speaking at the Annual Meetings Plenary, Georgieva, said low-income countries faced particularly difficult conditions, with high and rising interest burdens compounded by declining official aid.
“Too many countries carry too much debt,” she said, warning that debt-service obligations were crowding out development spending.
Georgieva said governments could not rely on economic growth alone to reverse rising debt trajectories quickly enough and called for credible medium-term fiscal plans to restore stability.
“The inescapable bottom line is that preserving stability requires fiscal consolidation in most high-debt countries,” she said.
However, she cautioned that fiscal adjustments must protect vulnerable households, limit the cost to future growth and be complemented by structural reforms that improve productivity.
World Bank mobilises $112bn in private capital
Banga, meanwhile, highlighted the need to mobilise private capital, expand infrastructure and create jobs for a rapidly growing young population.
He said 1.2 billion young people were expected to enter the labour market over the next 10 to 15 years, while the global economy was projected to generate only about 400 million jobs, leaving a potential shortfall of 800 million.
“The jobs gap is a projection. It does not have to be our future,” Banga said.
He argued that closing the gap would require countries to make better use of scarce resources by combining public finance, private investment, philanthropy and technology to support development.
Banga disclosed that the World Bank Group mobilised $112 billion in private capital last year, compared with approximately $35 billion in financial year 2022. Total financing, including the institution’s own resources, exceeded $230 billion.
However, he acknowledged that attracting commercial investment remained difficult in low-income countries, where private capital mobilisation stood at roughly $3 billion.
He said the World Bank was seeking to expand financing for micro, small and medium-sized enterprises by improving access to finance, connecting smaller businesses to larger markets and simplifying regulations that constrain growth.
Banga also identified infrastructure, human capital and regulatory certainty as essential foundations for job creation, noting that businesses needed reliable electricity, water, transport and digital connections, while workers required education, healthcare and relevant skills.
On electricity access, he said the World Bank Group and the African Development Bank were working to provide electricity to 300 million people across Africa by 2030 under Mission 300.
So far, 59 million people have gained access, with the pace accelerating from 12 million in financial year 2024 to 18 million in financial year 2025 and 28 million in the latest financial year.
“But access is only part of the challenge. Homes, mines, factories, farms, and growing cities need reliable, affordable baseload power,” he said.
Stakeholders also stressed the need for responsible fiscal policies, stronger domestic resource mobilisation, improved debt management and greater coordination between African governments and international financial institutions.