Analysts’ pessimism is forcing African countries to take loans on the international financial market, Misheck Mutize has told RT
The African Union (AU) is concerned about allegedly unfair assessments by credit ratings agencies and is taking steps to introduce its own rating agency next year, prominent African expert on credit ratings Misheck Mutize told RT on Thursday.
Almost half, or 22 out of the 55 member states of the AU, are not ranked among the ‘Big Three’ ratings agencies, Moody’s, Fitch and S&P Global Ratings, Mutize claimed. He also mentioned a recent report of the United Nations Development Programme (UNDP) which says “more objective credit ratings could save billions for African development” to approximately $74.5 billion.
“A lot of money has been lost in terms of opportunity cost and in terms of the huge debt burden that African governments are subjected to,” the expert said.
Misheck Mutize believes that there is “a lot of appetite for expansion in terms of having credit opinions” from any other source that could be affordable to prospective players in the financial market. The primary purpose of creating a new credit rating agency is to broaden the range of opinions, he added.
The AU intends to establish the credit rating agency in the coming year as an independent branch of the group, to assess the risk of lending to countries on the continent.
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According to Reuters, the ‘Big Three’ rating agencies deny any bias and assert that their ratings are consistent worldwide.
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