'African risk premium': AU launches own credit rating agency [Business Africa]

The African Union has launched its own credit rating agency, aiming to address the issue of high borrowing costs faced by African countries. This move is significant as African countries currently rely on international credit rating agencies, which often assign high risk premiums, driving up interest rates and limiting access to international capital. By establishing its own agency, the AU hopes to provide more accurate and favorable ratings, thereby reducing borrowing costs and increasing access to capital for African nations.

Why it matters

The African Union's own credit rating agency could reduce borrowing costs for African countries. This would increase their access to international capital.

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