African Union to Launch Continental Credit Rating Agency in October

The African Union (AU) is set to launch a continent-wide credit rating agency in October, a move aimed at addressing the high borrowing costs faced by African nations. The announcement was made on Wednesday by Paul Sikazwe, a technical adviser on debt to the AU Commission, during a conference on debt and development in Nairobi.

The new agency, an initiative of the African Peer Review Mechanism (APRM), will be officially inaugurated in Mauritius on October 5. Sikazwe described the launch as a significant step in the continent's push to reform the international financial architecture.

African leaders have long argued that the dominant global rating agencies—Fitch, Moody's, and S&P Global—do not fairly assess the risk of lending to African countries. They have also accused these firms of being overly quick to downgrade African economies during crises such as conflicts and pandemics. The agencies have defended their practices, stating that their ratings are based on the same methodology worldwide.

The initiative comes as debt issues across the continent have intensified, with countries like Zambia, Ghana, and Ethiopia experiencing sovereign defaults in recent years due to heavy borrowing and external shocks.

In a related development, the AU is also advancing plans for collective action on debt among its 54 member states. This includes the inauguration of the African Monetary Institute in Abuja later in October, which is intended to serve as a precursor to a future regional central bank.