UN's Gilpin: We need to prepare Africa better for credit ratings
Raymond Gilpin says that African officials must be helped to engage effectively with the credit rating process.
Raymond Gilpin, chief economist at the United Nations Development Programme (UNDP), argues that discussions about the Africa Credit Rating Agency (AfCRA) should focus more on African countries' readiness to engage with credit ratings rather than solely on the methodologies used by the big three agencies - Fitch, Moody's and S&P. Gilpin states that the high credit risk perception in Africa is primarily due to inadequate data collection, analysis, and coordination, rather than flawed rating methodologies.
To address this, Gilpin highlights UNDP's Africa Credit Ratings Initiative (ACRI), which has trained over 400 African professionals through workshops and online courses on the credit rating process. The initiative also provides senior officials with the opportunity to learn from countries that have successfully improved their credit ratings through executive study tours. Additionally, UNDP has developed a practical handbook tailored for African officials, offering a step-by-step guide to the ratings process.
For AfCRA to be truly transformative, Gilpin advocates prioritising the coverage of countries currently without ratings, which are primarily among those struggling to secure concessional development funds. He also emphasizes the potential of AfCRA to deepen African capital markets and increase participation from domestic investors, ultimately reducing foreign exchange risk.
Written by urgent.news from Africa Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
