Africa Credit Ratings Resource Platform

What we do

African countries face some of the highest borrowing costs in the world, partly due to structural problems (economic, governance and public finances), but partly also due to low credit ratings which make them seem like risky investments. Such ratings lead to higher interest costs and lower borrowing through sovereign bonds. They also indirectly affect the amount of equity flowing to the continent, as FDI is often deterred by low credit ratings. As part of UNDP’s project to support African countries improve their credit ratings, this knowledge platform is meant to serve as a one-stop-shop for data, methodological information, and research on credit ratings.

Learn more

11.3B

Maturity

$11.3 billion amount of outstanding Eurobonds due to mature in January 2024.

4.8B

Issuance

Benin, Kenya, and Cote d'Ivoire issued $4.8 billion in Q1 2024.

11.6%

Interest

Africa interest costs averaged 11.6%, 8.5 percentage points higher than the US Benchmark.

2.1%

Coupon

Sub-Saharan Africa paid 2.1% more in coupons than other regions from 2004 to 2021.

Publication

Lowering the cost of borrowing in Africa - The role of Sovereign Credit Ratings

The role of credit rating agencies is critical in determining sovereign creditworthiness and, consequently, the cost of debt for both sovereign and corporate borrowers. Questions have been raised about the determination of these ratings in Africa, where there is a dearth of relevant data and where ratings agencies may not have a presence in the countries. This dynamic could have dire implications for much-needed development finance across the continent. This report analyzes credit ratings methodologies in Africa, discusses financial and development ramifications, and proposes alternative approaches for countries where relevant data is scarce.