AU Chairman Macky Sall wants a pan-African financial rating agency
Senegalese President Macky Sall at the EU-Africa summit on February 18, 2022. AP - John Thys
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The Senegalese head of state, who is the current chairman of the AU, wants a less subjective rating of African economies.
Macky Sall advocates for the creation of a pan-African rating agency.
"The current risk assessment system is out of step with economic realities in Africa and this has consequences," he said on Saturday May 14 during the Dakar 2022 Economic Conference organized by African economists.
Only it will be necessary to be patient before seeing this agency replace those already existing.
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With our correspondent in Dakar
,
Birahim Touré
It is almost with annoyance that the President-in-Office of the African Union notes Africa's handicap in the face of financial rating agencies.
Macky Sall.
"
It is only fair, the need for us in the face of injustices on ratings, which are sometimes very arbitrary, to have a pan-African rating agency
"
, declared President Macky Sall.
Macky Sall, current AU chairperson, wants a pan-African financial rating agency
RFI
“
In 2020, as all economies felt the effects of Covid-19, 18 out of 32 African countries – rated 18 out of 32 – by at least one of the major rating agencies saw their ratings downgraded.
So this represents 56% of downgraded ratings for African countries against a global average of 31%.
In addition, studies have shown that at least 20% – 20% – of the rating criteria for African countries are based on rather subjective factors, cultural or linguistic, therefore unrelated to the parameters that gauge the stability of an economy.
The direct consequence is that the perception of investment risk in Africa is always higher than the real risk
,” explained President Macky Sall.
For Doctor Serigne Ousmane Beye, a teacher at the Faculty of Economics and Management at Cheikh Anta Diop University in Dakar, the idea is certainly attractive, it is doable, but it will take time.
“
Undoubtedly, so that it is operational immediately.
Because, you see, establishing the credibility of this agency, the countries can do that, because you have that credibility with the financial institutions who will trust us and will entrust you with rating work, but we can always maybe try to go there.
Obviously, while trying to manage effectively, to put seriousness into what we do.
Because an agency, once again, is experience, it's credibility
,” says Dr. Serigne Ousmane Beye.
A pan-African rating agency already exists, it is the GCR group present in about thirty African countries, but it assigns ratings in local and not international currencies.
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Read also: African financial rating agencies are starting to be taken seriously
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