LocationsThe African Experience with Sovereign Ratings
In 2003, UNDP made the development case for enhanced credit ratings in Africa and pioneered the rating of African countries, in partnership with S&P. Since then, African countries have had a checkered relationship with credit rating agencies. Also, unsolicited ratings, developed without the issuer’s approval nor involvement, are a serious bone of contention on the continent, with a number of African States privately and publicly challenging the ratings.
Eurobond Yields across Select African Countries 2022-2024
Source:Bloomingberg Finance L.P.
Recent increases in the yields of Eurobonds have exacerbated the debt-burden of African borrowers. The rising costs of debt-service are also increasing the pressure on the continent, while initiatives designed to help like the G20’s Debt Service Suspension Initiative (DSSI) and Common Framework had limited success.
