Amin Adam Backs Calls For Creation Of African Rating Agency

Amin Adam Backs Calls For Creation Of African Rating Agency

  • Finance Minister Dr Mohammed Amin Adam has thrown his support behind the establishment of an African sovereign credit rating agency
  • He said the rating agency would ensure African countries receive a balanced and comprehensive assessment of their credit risks
  • He said an African rating agency would serve as an alternative second opinion for developing countries on the continent

Finance Minister Dr Mohammed Amin Adam has backed calls for establishing an African sovereign credit rating agency.

He said such a rating agency would ensure a balanced and comprehensive assessment of credit risks, enabling African countries to access competitive capital and promoting the development of the continent’s domestic market.

Amin Adam Backs Calls For Creation Of African Rating Agency
Amin Adam says the creation of an African rating agency is long overdue.
Source: UGC

The Finance Minister said an African rating agency would offer an alternative sound second opinion when foreign rating agencies unfairly assess developing countries on the continent.

Speaking to the media, he said the African Development Bank should lead the charge by organising relevant stakeholders to determine the framework.

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The stakeholder meeting, he said, would be crucial to building the rating agency’s credibility.

Amin Adam echoed earlier comments by President Akufo-Addo at the 35th Africa Union Summit in Addis Ababa.

President Akufo-Addo stated that the African Union must guard against the stranglehold of international rating agencies and its effect on African countries’ access to cheap capital on the international market.

Meanwhile, the three major international rating agencies – Fitch Ratings, Moody’s Services, and S&P – have been intensely scrutinised as many countries have questioned their sovereign credit ratings.

Moody downgrades Ghana to junk status

Earlier, international credit rating agency Moody's downgraded Ghana to further junk status.

In the grading that started on September 30, 2022, Moody's also warned investors that they could lose in debt restructuring.

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In the latest review on Ghana, Moody’s downgraded the country's long-term issuer ratings to Ca from Caa2 or further junk status and changed the outlook to stable.

The rating agency states that because of Ghana’s high debt burden and the debt structure, substantial losses on both categories of debt are very likely.

Moody's says this will help the government to improve debt sustainability.

Touching on the stable outlook, Moody's stated that it balances their assumption that the debt restructuring will happen in coordination with creditors and under the umbrella of a funding program with the IMF.

Fitch predicts cedi’s appreciation

YEN.com.gh reported that the coming months will see the cedi appreciate against the dollar, according to Fitch Solutions, a rating agency.

According to Fitch, the cedi's worst run against the dollar and other trading currency is over and expects modest gains up to December 2022.

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The ratings agency however warned that the appreciation of the cedi could take a toll on the inflation rate.

Proofread by Berlinda Entsie, journalist and copy editor at YEN.com.gh

Source: YEN.com.gh

Authors:
Cornerlis Affre avatar

Cornerlis Affre (CA and Politics Editor) Cornerlis Kweku Affre is at present a Current Affairs Editor at Yen.com. He covers politics, business, and other current affairs. He has worked in various roles in the media space for at least 5 years. You can reach out to him at cornerlis.affre@yen.com.gh