For decades, African countries’ borrowing costs have been largely determined by major credit-rating agencies whose methods overlook key features of these economies’ institutions and markets. The new Africa Credit Rating Agency could mark a turning point, challenging how the continent’s credit risk is graded and priced.
NAIROBI—Imagine taking an exam and answering every question correctly, only to fail because your paper was graded against the answer key for a different exam. That, in a nutshell, is what happens when African institutions are assessed by major credit-rating agencies like Fitch, Moody’s, and S&P.
