Senegal President Macky Sall called Sunday for the creation of a pan-African credit ratings agency, saying that the "very arbitrary" nature of the system of assessment by international organizations made it more expensive for African countries to borrow on global debt markets.
Sall, who is currently head of the African Union, told private radio RFM that there was a need — "given the injustices, the sometimes very arbitrary ratings" by international agencies — "to have a pan-African" body.
His comments came on the eve of the Dakar Economic Conference 2022, organized by African economists.
"In 2020, when all economies were suffering fallout from the COVID-19 pandemic, 18 of the 32 African economies rated by at least one of the big agencies saw their ratings downgraded," he said.
That meant that 56% of African countries saw their credit ratings downgraded, compared with 31% of countries globally over the same period, Sall argued.
"Studies show that at least 20% of the ratings criteria for African countries are based on more subjective factors, cultural or linguistic ones for example, which bear no relation to the parameters used for measuring economic stability," he said.
As a result, "the perception of investment risk in Africa is always much higher than the real risk. That means our insurance premiums are higher and that makes our credit more expensive."
African countries continued to pay much higher interest rates as a result of this unfair system, Sall said.