Tinubu Calls for Africa-Owned Credit Rating Agency in Financial Times Commentary
In a recent op-ed published in the Financial Times, President Bola Tinubu of Nigeria issued a compelling call for the establishment of a credit rating agency owned and operated within Africa. He argued that this is necessary to counter the persistent mispricing of the continent’s risk by global financial markets, which forces African nations to pay excessively high borrowing costs based on flawed external assessments.
President Tinubu identified the so-called “Africa premium”—the gap between perceived and actual economic risk—as unsustainable. He noted that access to international capital is heavily dictated by the three dominant agencies: Fitch Ratings, Moody’s, and S&P Global. Their decisions, he contends, often fail to reflect local realities, with only three African countries holding investment-grade ratings despite the IMF projecting Africa as the world’s fastest-growing region this year. This mismatch, akin to the analytical disputes seen when Guardiola accuses Man United of a particular playing style, highlights a structural flaw in sovereign risk evaluation.
Citing a 2023 UNDP report, Tinubu stated that rating “idiosyncrasies” cost Africa an estimated $75 billion annually. He pointed to Nigeria’s own reforms—including fuel subsidy removal, exchange rate liberalization, and improved fiscal transparency—as evidence that policy adjustments can alter investor perceptions. However, he warned that smaller economies, lacking Nigeria’s scale, are particularly vulnerable to analytical delays, a challenge as significant as navigating Trump’s threat: US policy shifts for emerging markets.
This call follows a recent, high-profile disagreement between Fitch Ratings and the African Export-Import Bank (Afreximbank), which terminated its relationship with the agency in January. Afreximbank rejected Fitch’s assessment, defending its financial reporting and treaty protections. The situation underscores the deepening rift, reminiscent of internal critiques like when PDP elders accuse their own party of disunity, or the complex local governance required for initiatives such as the Onitsha Market: Soludo administration’s redevelopment project. As global dynamics shift, with moves like Russia moves revive old alliances, Tinubu’s proposition highlights Africa’s push for financial self-determination and a more equitable global system.
