“The honeymoon is over.”
Claver Gatete, Executive Secretary of the United Nations Economic Commission for Africa (UNECA), delivered this reality check on the sidelines of last week's #AnnualMeetings of the International Monetary Fund and The World Bank in Washington, D.C.
Speaking at a ministerial panel discussion organized by UNDP and The Brookings Institution, Gatete stated that concessional finance has not kept pace with Africa’s growing needs. "If we want bigger investments, we must be rated fairly," he noted.
Titled ‘Pathways to Tackling Africa’s Debt Crisis Through Improved Credit Ratings’, the panel featured three ministers: Retselisitsoe A. Matlanyane, Minister of Finance and Development Planning, #Lesotho; Ahmed Shide, Minister of Finance and Economic Cooperation, #Ethiopia; and Mutesi Rusagara, Minister of State for Public Investment and Resource Mobilization, #Rwanda.
👇 Key Outcomes:
#Narrative: With over 500 participants in attendance, the discussion reflects a growing shift in the narrative about the hidden costs of Africa's debt burden and the impact this will have on the continent's financial future. African countries pay a risk premium when accessing capital markets, despite data showing that default rates are lower than in other parts of the world. As highlighted in Ahunna Eziakonwa's opening remarks: "How Africa views the world and how the world views Africa impacts investment. It’s not just about ratings—it’s about changing perceptions as an urgent development priority."
#Impact: The ministers shared examples from their own national contexts, noting that credit ratings should not be based on a one-size-fits-all approach. Instead, non-traditional modelling and consistent policymaking can contribute to unlocking the resources required for long-term investment in infrastructure, healthcare, education and other critical sectors. The World Bank projects that in 2024, Africa is expected to pay $163 billion just to service its debts.
#Programming: UNDP’s credit ratings initiative is already supporting Ethiopia, Kenya, Tanzania and Uganda through capacity-building, technical assistance and strategic advocacy. The UN estimates that over $4 trillion is needed annually to close the global financing gap and achieve the #SDGs by 2030. Our work hopes to ensure credit ratings reflect on-the-ground realities, reduce borrowing costs and unlock investment flows for much-needed development financing.
Thank you to The Brookings Institution, AfriCatalyst, African Center for Economic Transformation (ACET) and Glasgow Financial Alliance for Net Zero (GFANZ); and UNDP Concilium Advisors Nikola G. Swann, CFA, FRM, Ann Rutledge, Mahesh K. Kotecha, CFA and Veronica Kalema; for contributing to the success of this important dialogue.
➡️ Watch the full recording here: https://lnkd.in/dmx5iiSR
➡️ Learn more about our work: https://lnkd.in/dQHzsmeu
#AfricaCreditRatings #WBGMeetings #UNDP #DebtCrisis #SustainableDevelopment #Agenda2063 #SDGs
