At the G20 summit in Johannesburg, Africa confronted the world’s credit rating giants once again.
S&P Global Ratings faced renewed claims that it unfairly penalises African economies.
Meanwhile, S&P’s head of sovereign ratings, Roberto Sifon-Arevalo, actively defended the firm’s approach.
He said, “We don’t treat Africa, Latin America or Asia differently.”
Furthermore, he added, “Our methodology has been public and available for decades.”
However, he argued that critics often compare African economies to Europe or the United States.
In contrast, he explained, they rarely benchmark Africa against Southeast Asia or Latin America.
Although human judgment affects ratings, he stressed that methodology remains fully transparent.
G20 African Calls For Greater Oversight
Earlier this week, African experts urged G20 leaders to increase oversight of rating agencies.
They warned that opaque methods drive up borrowing costs for African governments.
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Additionally, the panel highlighted “perception biases,” which often make Africa appear riskier than comparable regions.
Consequently, African leaders have taken action to address these concerns.
Africa Launches Its Own Agency
In February, the African Union launched AfCRA, its own credit rating agency.
Then, Kenya’s President William Ruto unveiled it at an AU meeting in Addis Ababa.
A study by the Africa Peer Review Mechanism and the UN estimated that biased ratings cost Africa $75 billion.
Moreover, the AU had planned the agency for years, officially moving forward in 2023.
Africa now aims to challenge perceived negative bias from Moody’s, Fitch, and S&P.
The new agency hopes to provide fairer, transparent assessments and support local development.
As the G20 summit progresses, the debate continues: can Africa finally set its own financial standards?
