President William Ruto has strongly criticized global credit rating agencies, accusing them of misrepresenting Africa’s economic realities and stalling the continent’s financial progress.
Speaking at a High-Level Presidential Breakfast Dialogue in Addis Ababa on Friday, February 14, Ruto argued that these agencies have contributed to Africa’s economic struggles by producing biased ratings that exaggerate risks and make borrowing more expensive.
How Credit Ratings Affect Africa
According to Ruto, global rating agencies unfairly assess African economies, leading to distorted ratings that scare away investors and increase the cost of borrowing.
He emphasized that these misjudgments have far-reaching consequences, including reduced foreign investment, slowed economic growth, and derailed efforts towards sustainable development goals (SDGs).
“The whole system is very biased. The result is that they paint a very unfair picture of our economies, and this has devastating effects because it leads to distorted ratings of the situation and exaggerated risks for our country and our continent,” Ruto stated.
He further highlighted that the financial losses resulting from biased credit ratings are enormous, citing findings from the Africa Peer Review Mechanism (PRG) and the United Nations Development Programme (UNDP).
These institutions estimate that Africa loses nearly $75 billion in investment opportunities due to prejudiced assessments by global credit agencies.
READ: President Ruto Hires International Agencies to Restore Global Image and Attract Investment
Unfair Comparisons and Systemic Inequality
Ruto also pointed out that the credit rating system favors some economies over others, even when African nations have comparable or better economic fundamentals.
He expressed concerns that Africa is penalized with high borrowing costs, while other regions with similar or weaker economies receive preferential ratings.
“A system that punishes our economies while rewarding others, even when the fundamentals are comparable or even better,” he remarked.
Call for Fairer Global Financial Systems
The Kenyan president called for urgent reforms in the global financial system, urging African nations to unite and challenge the unfair practices of credit rating agencies.
His remarks align with a broader push by African leaders for greater financial autonomy and fairer assessments of the continent’s economic potential.
With Africa positioning itself as a key player in global trade and investment, Ruto’s statements highlight the ongoing struggle for equitable treatment in international finance.
His call for reform is expected to spark further discussions on creating alternative credit assessment mechanisms that better reflect Africa’s true economic strength.
