Cape Town, 21 May 2025 (ECA) - The United Nations Economic Commission for Africa (ECA) has called for urgent reforms to sovereign credit rating practices that continue to undermine African countries’ access to affordable capital, despite clear signs of macroeconomic resilience and structural reform across the continent.
Speaking at the opening of the inaugural Africa Annual Credit Ratings Conference in Cape Town on 21 May, Zuzana Schwidrowski, Director of ECA’s Macroeconomics, Finance and Governance Division, said outdated and inconsistent rating methodologies were contributing to disproportionately high borrowing costs for African nations.
“Africa’s development should not be held hostage by narrow perceptions of risk,” she said. “Credit ratings are more than technical assessments. They shape the continent’s access to development finance, influence investor sentiment, and directly affect the cost of capital.”
Currently, only two African countries hold investment grade ratings. According to Ms Schwidrowski, this reflects not just fiscal challenges but also systemic flaws in how major global credit rating agencies assess sovereign risk in Africa. She cited issues such as limited country coverage, lagging data, and structural biases that fail to consider ongoing reforms and local economic fundamentals.
“Improving sovereign and sub sovereign credit ratings is not just about accessing capital markets,” she added. “It is about building confidence, expanding fiscal space, and unlocking the vast potential of domestic resource mobilization.”
The ECA official highlighted the growing momentum across Africa to strengthen domestic creditworthiness and develop regionally embedded rating capabilities. She pointed to coordinated efforts by central banks, finance ministries, and regional institutions to improve debt transparency, broaden tax bases, reduce illicit financial flows, and enhance statistical systems.
At the institutional level, ECA continues to support countries in strengthening fiscal risk management, issuing local currency bonds, and building resilient domestic capital markets. These reforms, she said, are vital to helping African governments take ownership of their financial narratives and engage with rating agencies on fairer and more accurate terms.
Ms Schwidrowski stressed that aligning credit rating improvements with broader structural transformation goals would multiply the impact of reforms and facilitate long term sustainable investment.
“Stronger credit ratings serve as a signal of economic stability and good governance, exactly the qualities sought by both international and domestic investors,” she noted. “Ultimately, we must build a new cycle of credible, positive ratings anchored in African leadership and supported by a fair, transparent global system.”
The two-day conference is hosted by the African Peer Review Mechanism in partnership with ECA, UNDP Africa, and AfriCatalyst. It brings together policymakers, economists, rating analysts, and development partners to explore ways to reform credit rating methodologies and strengthen Africa’s access to sustainable financing.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org