President William Ruto has faulted global credit rating agencies over what he terms as being unfair to African countries in their ratings.

Speaking on Friday, February 14, 2025, during the launch of the African Credit Rating Agency (AfCRA) during the presidential breakfast on the sidelines of the 38th Ordinary Assembly of the African Union, Ruto said global credit rating agencies have been deliberately failing Africa. 

“The time has come to rewrite our history, reclaim our narrative, and charge the African Renaissance forward. Esteemed colleagues, our urgent calling is to fulfil our duty to Africa’s people and ensure that our continent takes its rightful place in shaping global progress in its full capacity and potential,” Ruto stated.

According to Ruto, the global agencies have been using flawed models, outdated assumptions, and systemic bias, painting an unfair picture of African economies and leading to distorted ratings, exaggerated risks, and unjustifiably high borrowing costs.

“That is why we are gathered here today. Africa’s economic potential is hamstrung by a financial system that misrepresents, distorts, and understates our reality. Global credit rating agencies have not only dealt us a bad hand, they have also deliberately failed Africa,” he added.

“These prejudiced assessments come at an enormous cost not just to Africa but to the world. They deter investment, distort global trade, and derail progress towards the Sustainable Development Goals. By misjudging Africa, these agencies deny opportunity to investors and economies and deprive nations of prosperity.”

Ruto laments that despite Africa’s natural wealth, vast arable land, billions in diaspora remittances, and the world’s largest carbon sinks, credit rating agencies have delivered 94 per cent of all downgrades in the past decade, while arbitrarily designating only two African nations as investment grade.

Ruto has termed the situation as a financial straitjacket imposed on Africa, a system that punishes African economies while rewarding others, even when the fundamentals are comparable.

“The foundations of global finance are supposed to be anchored on the principles of fairness, transparency, and merit. Yet, these principles are disregarded when it comes to Africa,” he stated.

“Africa will no longer accept to be misjudged by scales that overlook our reality. The winds of change are blowing, and our march forward is as unstoppable as it is relentless. An African Credit Rating Agency is not just an alternative, it is an imperative. This agency must be globally credible and backed by rigorous, credible data and driven by high reporting standards from our own governments. But more importantly, it must reflect Africa’s reality correctly.”

Ruto says African countries must work to strengthen the capabilities of Pan-African credit rating agencies and expanding their reach. 

“The potential impact is profound. Research shows that a one- level improvement in Africa’s average credit rating would unlock $15.5 billion in additional funding. This alone would outstrip Official Development Assistance by 12% and meet 80% of Africa’s infrastructure needs. The opportunity is within our grasp, and we must seize it,” Ruto said. By Francis Muli, People Daily