President William Ruto has reiterated the need for comprehensive reforms in the global credit rating system, arguing that biased assessments have cost Africa trillions in lost opportunities. Speaking on Friday during the presidential breakfast at the 38th Ordinary African Union Assembly in Addis Ababa, Ethiopia, Ruto underscored how flawed credit rating models have hindered economic growth and financial independence across the continent.
Ruto criticized the current rating system for distorting Africa’s creditworthiness by exaggerating risks and imposing high borrowing costs. He pointed out that such a system discourages investments and stifles development, leading to financial setbacks estimated at Ksh.9.6 trillion. According to the president, implementing reforms could unlock Ksh.2 trillion in additional funding for African economies, enabling them to leverage their vast resources for growth and prosperity.
“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 per cent of all downgrades in the past decade, while arbitrarily designating only two African nations as investment grade,” Ruto said.
The Kenyan head of state urged fellow African leaders to hold rating agencies accountable and push for fairer assessments that accurately reflect Africa’s economic potential. He described the current system as a “straightjacket” that restricts the continent’s financial capabilities and called for an objective, transparent, and replicable rating framework.
“I see the role of the Africa Credit Rating Agency as one of demystifying and democratising sovereign credit assessments,” he stated, emphasizing the need for a regional alternative to challenge global rating firms’ biased methodologies.
Since assuming office, Ruto has been vocal about the necessity for reforms in the global financial system, advocating for mechanisms that allow African nations to restructure their debts based on credible and fair ratings. His push aligns with broader efforts by African leaders to establish a more equitable financial landscape that fosters sustainable economic growth.
Alongside financial discussions, the Addis Ababa summit is also set to elect the next African Union Commission chairperson and deputy. Kenya is represented in the contest by former Prime Minister Raila Odinga, who is competing against Djibouti’s Mahmoud Ali Youssouf and Mauritius’ Richard Randriamandrato.
Ruto’s remarks at the AU summit highlight Africa’s growing demand for a just and transparent credit rating system, which, if achieved, could transform the continent’s economic trajectory and unlock much-needed financial resources.
