President Bola Tinubu has called for a fairer global financial system, arguing that African countries face disproportionately high borrowing costs due to what he described as persistent misjudgement by dominant international credit rating agencies.
Writing in an opinion article, Tinubu said Africa was “paying too much to borrow”, noting that calls to end the so-called “Africa premium”, the gap between how the continent is assessed and the underlying reality of its economies, could no longer be ignored.
He pointed to the outsized influence of the world’s three major credit rating agencies, saying their assessments shape investor behaviour and Africa’s access to international capital, yet often fail to accurately reflect local economic conditions.
“Fitch, Moody’s and S&P Global Ratings… wield outsized influence over Africa’s access to international capital. Their judgements shape investor behaviour, yet they consistently misjudge African risk,” Tinubu wrote.
According to him, the consequences of these perceived distortions are significant. He cited a 2023 report by the United Nations Development Programme which found that “idiosyncrasies” in credit ratings cost Africa about $75bn annually through excess interest payments and lost lending opportunities.
Tinubu noted that only three African countries currently hold investment-grade ratings, despite projections by the International Monetary Fund that the continent would be the world’s fastest-growing region this year.
He said plans to establish an African credit rating agency were therefore a “necessary corrective”, particularly given what he described as the biggest weakness of existing global agencies: limited on-the-ground presence.
In their models, he said, quantitative data is combined with subjective judgements on political risk, institutional strength and policy durability, while “how those judgements are reached and how much they count is left to opaque ‘analyst discretion’.”
“Conclusions drawn from afar fail to capture local realities,” he added.
Tinubu also argued that reliance on these assessments often amplifies global market cycles rather than reflecting individual countries’ fundamentals. He noted that commodity-dependent African economies are frequently downgraded when global prices fall or financial conditions tighten, even when their reserves remain strong and fiscal buffers intact.
“Downgrades then become self-fulfilling, raising borrowing costs and straining public finances,” he wrote.
While backing the creation of a continental ratings agency, Tinubu stressed that it must build global credibility through timely and comprehensive data that investors trust.
He cited Nigeria’s recent credit upgrades as partly reflecting improvements in economic data transparency, including bringing previously off-balance-sheet central bank lending into official public debt records, rebasing GDP, and publishing more budget documents.
He also pointed to policy reforms such as the removal of fuel subsidies and exchange-rate liberalisation, saying these measures had supported non-oil growth and helped diversify the economy.
“The rest reflects hard policy choices, such as the removal of a wasteful fuel subsidy and the liberalisation of the exchange rate,” he wrote.
Despite these efforts, Tinubu said Nigeria’s ratings still lag behind reforms and investor sentiment, noting that the country’s November dollar-denominated bonds were oversubscribed 5.5 times.
“Slow upward adjustments are commonplace across Africa, especially when set against the speed of downgrades,” he said, adding that smaller countries with less market visibility bear the costs most heavily.
Tinubu argued that a continent-wide ratings agency could help capture reform momentum in real time, reducing delays that he said prevent African nations from accessing markets quickly after implementing tough policy changes.
“Africa’s success is not a regional concern but a global opportunity,” he wrote, noting that by mid-century the continent would account for a quarter of the world’s working-age population.
He added that while global capital markets would continue to rely on established agencies for validation, an African agency could serve as an early signal of progress and help ensure countries are able to compete on what he described as a level playing field.
