GUEST INTERVIEW – African Union plans to launch its own sovereign credit rating agency

Reactions are trailing the AU’s plan to launch its own sovereign credit rating agency next year as an alternative to the “big three” international rating agencies, which it believes unfairly rank countries on the continent.

The African Union believes international credit rating agencies have been giving erroneous ratings to African countries.

Moody’s, Fitch and S&P make significant errors in their ratings, yet continue to influence global financing decisions and the flow of capital, according to a report for the United Nations Economic Commission for Africa (UNECA).

The report says that Ghana’s president Nana Akufo-Addo criticised the agencies for exacerbating fiscal challenges in developing countries with unwarranted rating downgrades that shut governments out of the capital markets.

Could this be what informed the AU of this decision?

Jide Akintunde, the managing editor of Financial Nigeria talks to WADR on this.