Dr. Yemi Kale, Group Chief Economist and Managing Director of Research and Trade Intelligence at Afreximbank, has called out international credit rating agencies for contributing to the high borrowing costs facing African countries.
Speaking during a Q&A session at the launch of the African Trade Report 2025, held at the bank’s Annual Meetings in Abuja, Dr. Kale said current rating models misrepresent Africa’s economic realities. He noted that these models often inflate risk perceptions, pushing up interest rates for African borrowers.
Dr. Kale proposed the creation of an African-focused rating agency, one that would use metrics more aligned with the continent’s economic structure and context. He pointed to regions like Asia that already have their own systems and stressed that Africa must follow suit.
He acknowledged that global resistance is expected at first, but predicted acceptance would grow as more African nations adopt and support the homegrown agency.
Dr. Kale also urged African governments to strengthen local financial institutions and increase funding for regional development banks. He emphasized the need to seek capital from alternative sources such as China, instead of relying solely on Eurobond markets where ratings often work against African nations.
He stressed the importance of intra-African trade as a buffer against external shocks, noting a major milestone—Nigeria, for the first time, traded more with African countries than with other global regions.
Despite challenges, Kale maintained a positive outlook, highlighting that Africa’s relatively low integration into global finance has helped shield it from some of the world’s recent economic volatility. He expressed optimism that Africa’s economic resilience will continue to grow.
The African Trade Report 2025 offers insights into policy trends and provides strategic recommendations for governments and businesses navigating today’s global financial challenges.
