President William Ruto has sharply criticized global credit rating agencies, accusing them of systemic bias that unfairly portrays African economies and results in exorbitant borrowing costs for the continent.
Speaking on Thursday during the Presidential Breakfast at the 38th Ordinary Assembly of the African Union in Addis Ababa, Ruto said the agencies rely on outdated models that misrepresent Africa’s economic potential.
“Global credit rating agencies have not only dealt us a bad hand, they have also deliberately failed Africa,” Ruto stated. “They rely on flawed models, outdated assumptions, and systemic bias, painting an unfair picture of our economies and leading to distorted ratings, exaggerated risks, and unjustifiably high borrowing costs.”
He highlighted the staggering financial losses Africa has suffered due to these misjudgments, estimating missed opportunities at $75 billion (Sh9.7 trillion).
Despite Africa’s vast natural resources, extensive arable land, substantial diaspora remittances, and the world’s largest carbon sinks, he lamented that the agencies have delivered 94% of all downgrades to African nations in the past decade, with only two countries earning investment-grade ratings.
“By misjudging Africa, these agencies deny opportunities to investors and economies and deprive nations of prosperity,” Ruto asserted. “This system punishes our economies while rewarding others, even when the fundamentals are comparable, if not better.”
To counter the biased assessments, Ruto emphasized the need for an African-led alternative and announced the establishment of the African Credit Rating Agency (AfCRA).
“An African Credit Rating Agency is not just an alternative; it is an imperative,” he declared, adding that the agency must be globally credible, backed by rigorous data, and truly reflective of Africa’s economic reality.
Ruto further pointed out that improving Africa’s average credit rating by just one level could unlock an additional $15.5 billion in funding, a significant boost toward meeting the continent’s infrastructure needs.
The President also praised the efforts of the United Nations Development Programme and AfriCatalyst in strengthening Africa’s financial standing, echoing the sentiments of African Development Bank President Akinwumi Adesina: “The perception of risk is not the reality of risk. Wrong scales will always give wrong weights.”
Ruto’s remarks reinforce Africa’s push for financial independence and fairer treatment in the global economic system.
