Live transmission

Africa today faces a defining paradox. The continent is widely perceived as capital-scarce and highly risky, yet Africa possesses significant domestic financial resources capable of financing its own transformation. While Africa’s annual financing gap for infrastructure, industrialisation, energy, and trade is estimated at approximately US$280 billion, African institutions collectively control an estimated US$4 trillion in domestic capital in the form of central bank reserves, pension funds, sovereign wealth funds, insurance assets, bank deposits, and long-term savings.

Despite this substantial capital base, a large proportion of African savings is invested outside the continent. African central banks hold an estimated US$5301 billion in reserves offshore, primarily in low-yield instruments such as United States Treasury securities and European financial assets, earning very low returns. Similarly, African pension funds, sovereign wealth funds, and insurance companies continue to invest predominantly in investment-grade assets located outside Africa due to prevailing prudential regulations and global investment norms.

Ironically, the same foreign financial institutions that receive African capital subsequently reinvest it back into Africa at significantly higher returns through sovereign Eurobonds and other debt instruments. Since 2003, African countries have issued more than US$200 billion in sovereign Eurobonds, borrowing at interest rates ranging between 9% and 15%, among the highest globally.

This structural contradiction has contributed to persistent dependence on external financing, shallow domestic capital markets, and high borrowing costs across the continent. It has also reinforced a global financial architecture in which African risk is systematically overstated, resulting in distorted perceptions of creditworthiness.

Against this backdrop, African policymakers, financial institutions, and continental bodies are increasingly calling for the development of a new African 

architecture anchored on domestic capital mobilisation, stronger regional financial institutions, and context-sensitive credit rating systems.

The growth of the credit rating industry in African represents an important strategic reform aimed at reshaping how African risk is assessed and communicated. This paradigm seeks to move discussions towards more empirically grounded methodologies, development-oriented, transparent and methodologies to be more reflective of African realities, while strengthening investor confidence and supporting the growth of domestic capital markets.

The African Union’s February 2024 Declaration calling for the rechannelling of African reserves and savings back into African institutions marked a historic policy shift toward financial sovereignty and self-sustaining development finance.

It is within this context that the African Peer Review Mechanism, United Nations Economic Commission for Africa, United Nations Development Programme, AfriCatalyst and strategic partners are convening the Africa Annual Conference on Credit Ratings.

The conference is a premier continental platform bringing together policymakers, central bankers, regulators, institutional investors, credit rating agencies, development finance institutions, academics, and market participants to deliberate on the future of Africa’s financial architecture. The conference will advance dialogue on reforming credit rating systems, mobilising domestic capital, deepening African financial markets, reducing borrowing costs, and strengthening Africa’s financial sovereignty.

Its main aim is to catalyse actionable reforms that enable African capital to remain, circulate, and grow within the continent in support of sustainable development, industrialisation, regional integration, and economic resilience.

Documents

• Concept note
• Programme

YouTube streaming information