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Africa wants to have its own rating agency which will enable it to make considerable savings. This is the plea of the Board of Governors of the African Development Bank (AfDB) which called for the creation of an African rating agency, in order to allow African countries to benefit from more financing for their socio-economic development.
The Board of Governors stressed “the need to establish an African rating agency, for a fair and appropriate assessment of sovereign and non-sovereign operations on the continent,” said AfDB Group President Akinwumi Adesina during the ceremony. closing of the work of the 2024 Annual Meetings of this financial institution which were held in Nairobi (Kenya).
The main objective of this type of institution “is not to compete with international rating agencies, but to establish a new evaluation culture which takes into consideration the different specificities of African economies”, underlined the first official. of the ADB.
According to him, the creation of an African rating agency will, through its new vision, save more than $75 billion spent on debt service due to an “unfair” rating, a significant amount which was to be intended for development projects in Africa.
The Board of Governors also recommended reviewing the method of calculating the Gross Domestic Product (GDP) of African economies by including the continent’s green wealth (forests, carbon storage, etc.), said Mr. Adesina.
Africa’s undervalued GDP reflects poorly on these economies because it does not include all of its natural wealth, he said.
The governors of the AfDB also approved an increase in the institution’s “callable” financial resources, by 117 billion dollars, from 201 billion to 318 billion, said Mr. Adesina adding that this measure would make it possible to mobilize more liquidity to finance the growing development needs in Africa.
He also highlighted the importance of maintaining the AfDB’s AAA rating in order to preserve its role as a key development instrument in Africa.
Furthermore, the governors were unanimous in emphasizing that the reforms of the global financial architecture should be accompanied by the intensification of efforts by African countries to improve the macroeconomic environment, mobilize more internal resources, expand the tax base, and fight effectively against the informal sector, illicit flows and corruption.
During a press conference organized after the official closing, Mr. Adesina considered it essential to take African specificity into consideration when developing climate strategies, particularly in Europe.
In this sense, he estimated that the carbon tax, which will be imposed from January 1, 2026 on the borders of the European Union, will penalize African exports, recalling “the particular situation of this continent which only contributes 3% greenhouse gas emissions.
“We must show flexibility so as not to compromise Africa’s industrialization process,” he argued, adding that the impact of the European carbon tax on the continent’s economies is estimated at 35 billion dollars as annual losses on exports.