ADIS ABABA, Ethiopia – President William Ruto has called for urgent reforms in the global credit rating system, arguing that biased assessments are stifling Africa’s economic potential by inflating risks and raising borrowing costs.
Speaking on Friday at the presidential breakfast on the sidelines of the 38th Ordinary African Union Assembly in Addis Ababa, Ruto criticized international rating agencies for what he described as flawed models that disadvantage African economies.
He asserted that these skewed ratings have led to exaggerated risk perceptions, discouraging investment and costing the continent an estimated Ksh.9.6 trillion in lost opportunities.
“In a continent abundant with natural wealth, vast arable land, billions in diaspora remittances, and the world’s largest carbon sinks, credit rating agencies have delivered 94 percent of all downgrades in the past decade, while arbitrarily designating only two African nations as investment grade,” Ruto said.
The Kenyan leader urged fellow African heads of state to hold rating agencies accountable and push for an objective, transparent, and replicable credit assessment system.
He pointed to the Africa Credit Rating Agency as a potential solution to “demystify and democratize” sovereign credit evaluations.
Ruto further argued that addressing the biases in the system could unlock up to Ksh.2 trillion in additional funding for Africa, enabling countries to access fairer financing terms.
He likened the current rating regime to a restrictive straightjacket that limits Africa’s financial sovereignty and economic independence.
Since taking office, Ruto has been vocal about the need for global financial system reforms, advocating for fairer debt restructuring mechanisms for African nations.
His calls for change align with a broader continental push to reduce reliance on external financial institutions that impose stringent borrowing conditions.
Meanwhile, African leaders gathered in Addis Ababa for the AU Assembly are also set to elect the next chairperson of the African Union Commission.
Kenya’s candidate, former Prime Minister Raila Odinga, is in the running against Djibouti’s Mahmoud Ali Youssouf and Mauritius’ Richard Randriamandrato.
