African countries need an Africa-centred credit rating ecosystem that supports fair, accurate and forward-looking assessments of Africa’s economies, UN Under-Secretary-General and Economic Commission for Africa executive secretary Claver Gatete has said.

Such ratings have until now been shaped by limited data, inconsistent criteria and inadequate engagement with African institutions, he said during the 2025 Spring Meetings of the World Bank and International Monetary Fund High-level event on developing a credit rating ecosystem in Africa on April 23.

The consequences include higher borrowing costs, constrained access to global capital and fewer resources available for infrastructure, health, education and climate resilience among other sectors.

African countries have paid on average 12% to 14% on Eurobonds interest in the past two years, compared to an average of 3% for the European area or Vietnam, and the need for an Africa-centred credit rating ecosystem cannot be overstated.

Such an ecosystem will enable countries to mobilise affordable, long-term and accessible capital that the continent requires for its development agenda, and not rely on the current system that deters foreign direct investment, inflates debt servicing costs and distorts perceptions of risk.

To achieve this, an African credit rating ecosystem must be established that reflects Africa’s regional realities and complements rather than merely mimics global agencies. This must be an ecosystem that works for Africa, one that is African-led, African-informed and globally credible.

Therefore, and most critically, Africa’s domestic capacity must be built up, which means empowering African professionals with the technical expertise and the institutions necessary to lead credit analysis based on Africa’s own realities.

Further, developing a credit rating ecosystem required that data systems be strengthened. In this regard, national statistical offices, credit bureaus and regional observatories must be equipped to deliver timely, granular and context-rich data, Gatete proposed.

In addition, a robust regulatory framework, inspired by international best practices such as the European model, must then be built where rating actions follow a transparent and predictable calendar.

Such an ecosystem would also require cross-sector collaboration, such as sovereign issuers, investors, regulators and international partners, all working in harmony. A well-functioning credit rating system must be greater than the sum of its parts, he added.

“In a continent of 54 nations, with a combined GDP of $3-trillion and some of the most dynamic economies in the world, only two countries, namely Botswana and Mauritius, hold investment-grade credit ratings. The current global financial system is simply not working for Africa,” said Gatete.

African countries have immense promises in their dynamic populations, expanding regional markets and increasing innovation across sectors, but many countries are grappling with rising debt vulnerabilities, reduced fiscal space and mounting costs of borrowing in international markets, he noted.

With South Africa’s chairmanship of the G20 and the African Union now seated as a permanent member, there is a unique opportunity to push for reforms that reflect the lived experiences of Africa's nations.

“Together, we can build a credit rating ecosystem that is truly fit for current purposes and fit for Africa’s future.”