Nigeria’s president Bola Tinubu has endorsed the proposed Africa credit rating agency (AfCRA), citing its potential to deliver fairer, more transparent credit assessments for African economies.
Tinubu gave his support for the initiative on Sunday at the 38th Ordinary Session of the Assembly of the African Union (AU) Heads of State and Government in Addis Ababa, Ethiopia.
He said, “an independent Africa-led rating agency will help provide fairer assessments of African economies and reduce the bias often observed in existing global rating agencies.”
This development follows the decision of Fitch, a global rating firm, to stop assessing Dangote Industries, a Nigerian conglomerate with operations in key sectors including food production and oil refinery.
Fitch had previously placed the group under negative watch due to the company’s difficulties in repaying its large debt, raising investor concerns.
Nevertheless, Dangote Industries continues to move ahead with its expansion plans.
In a press briefing on Saturday, the company’s CEO, Aliko Dangote revealed plans to invest $400 million to revive a second production line at the Mugher cement plant in Ethiopia, aiming to double the facility’s annual capacity to 5 million tons.
He noted that despite the past challenges, which limited the plant’s operations, all loans have been repaid and profits repatriated.
Meanwhile, Tinubu praised the AU, the African Development Bank (AfDB), and the Specialised Technical Committee (STC) on Finance for their visionary leadership in advancing an African framework for financing development among member states.
He argued that the Africa Financing Stability Mechanism (AFSM) is crucial as the continent faces rising borrowing costs, debt overhang, low domestic resource mobilisation, and limited access to long-term affordable financing.
“The establishment of the AFSM underscores the collective commitment of member states to addressing financial vulnerabilities and fostering economic resilience across the continent,” the President said.
“This mechanism is envisioned to support member states in achieving their national development objectives, and it will also help create economic opportunities for citizens.”
The Nigerian leader also believes that the adoption of the financing initiative by member states will strengthen resilience against external shocks, and provide a more coordinated approach to managing financial risks across the continent.
Tinubu’s endorsement comes after Kenya’s President, William Ruto criticized the major global rating agencies for what he views as unfair and biased credit assessments of African economies.
According to a study by the Africa Peer Review Mechanism and the United Nations Development Programme, cited by Ruto, Africa has lost a staggering $75 billion in missed opportunities due to biased grading.