'Historic' Move: Creating African CRA Allows 'Shaping Narrative' on Risk & Investment, Expert Says

"The AU's decision to establish an African CRA is historic, and this move was made by the AU, as African countries have continuously received unfair credit ratings as a result of a very biased and very flawed system. This system has had a negative impact on the growth and development of African nations," the expert said.

"These ratings mostly affect external perception on the risk of investing in African countries. This is referred to as the African risk premium. Having our own CRA means that we can shape the narrative around risk and investment, and this will ultimately promote greater investor confidence and open up larger amounts of financing that will enable African governments’ greater access to capital and integrate the continent within the larger global financial system," the advisor pondered.

"However, we still have a long way to go to make this operational and to start seeing the fruits of this initiative. And as with many new initiatives that sort of challenge the status quo, I would expect some pushback from well-established agencies. But that should be something that is expected and something we prepare for, and we should not allow that to deter us from work," Kebret warned.

"Remember that Africa as a whole is the eighth-largest economy in the world. This will mean that African countries will have access to not only more finance but also cheaper finance, and that will enable countries to easily service their debt and also put that money in growth-producing sectors that will have a positive impact on their individual economies, but also the continent as a whole, which will create stability and help the continent achieve Agenda 2063," the guest concluded.