The push to reform how Africa’s creditworthiness is assessed is gathering pace.

This comes with the official launch of the African Credit Rating Agency (AfCRA) in Johannesburg.

The gathering brings together regulators, institutional investors and sovereign representatives among others. AfCRA is dedicated to advancing credit rating standards, transparency and collaboration across Africa’s financial markets.

Kenyan financial expert Sam Omukoko notes that of Africa’s 54 countries, only 33 have sovereign credit ratings with fewer than six are rated investment grade.

He says that with African governments paying more than 407 billion dollars in interest, improving sovereign credit ratings has become critical.

“Last year, here in Kenya, the National Treasury did organise a workshop specifically to address how Kenya can improve its investment grade rating. Kenya has always been rated in category B. It moved from B plain, B plus, B minus and it has various external borrowings from the euro bond markets and also from IMF and World Bank. And if you look at the interest rates that Kenya is charged on its borrowing, it is significant. Yet, if you look at the historical credit performance of Kenya, it has never defaulted on any of its obligations. So why does it remain below investment grade?”

Economist Hannah Ryder says building credible African credit ratings comes down to collaboration and making a stronger case.

“So, I think we must, the second task is really collaboration first, then second is to work together to strengthen the arguments and data, whether it’s through joint policy briefs, joint analysis, these sorts of even joint lines to take on certain issues could be very useful for AfCRA to work together on.”

Closing the talks, Parliamentarian and Build One SA leader Dr Mmusi Maimane highlighted the importance of voluntary associations like AfCRA.

“I want to say to you as a policy maker that yes, help us be able to give a sense of sustainable financial stability within the continent by being able to assess accurately and give rating in the continent so that when we borrow capital, it does not strangle African countries into profound debt and get servicing costs over a long period of time.”

Recent disputes like Afreximbank’s public break with Fitch have highlighted how global rating models often struggle to adapt and appreciate the dynamics of Africa and its institutions and mandates.