The US and AfDB agree to spend $700k to create a credit rating system for African markets
A $700,000 donor contribution agreement was signed by the African Development Bank (AfDB) and Prosper Africa, a U.S. presidential initiative, to create an online credit rating data platform for African markets.
AfDB vice-president for agricultural, human, and social development Beth Dunford claimed the U.S. Treasury Department was also involved in the deal in a statement released on Saturday.
Dunford clarified that the program would support the bank’s 10-year goal by enhancing the analytical capabilities of AfDB regional member nations (RMCs).
In order to solve long-standing issues with data accessibility that have historically distorted risk perceptions of African economies, the platform would be an essential online data and analytical tool, she said.
The platform is anticipated to reduce funding costs for the regional member countries (RMCs) of the AfDB by bridging the gap between perceived and actual investment risks.
“The project will also improve RMCs’ analytical skills, enabling them to simulate credit ratings and comprehend credit rating methodologies better.”In order to support evidence-based policymaking, the platform seeks to deliver fast, thorough, and high-quality information as a public good.
The platform, which will be available to investors, researchers, credit rating agencies, and sovereign organizations, will enhance the assessment of investment risks throughout Africa.
“The project is in line with the AfDB’s mission to improve economic governance on the continent and its Ten-Year Strategy (2024–2033).”
Prosper Africa’s involvement, according to Dunford, supports its objective of fostering two-way investment and trade flows in order to deepen economic relations between the United States and Africa.
According to Dunford, since 2023, the effort has made changing investor perceptions of African markets a top priority, with a special emphasis on sovereign credit ratings.
The vice-president of the AfDB went on to say that the bank would host and oversee the platform, guaranteeing quality control and utilizing its vast knowledge of African economic data.
To combat the prejudice of Western credit rating companies against Africa, the African Development Bank (AfDB) announced in December 2024 that African nations, including Nigeria, had joined together to create a continental credit rating agency.
