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Kenya hosts meeting on innovative credit rating solutions to spur African growth

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Experts met in Nairobi, the capital of Kenya, late Tuesday to discuss innovative credit rating solutions aimed at empowering African countries to access critical financing for development initiatives.

The meeting brought together more than 100 representatives from government, academia, finance, private sector, civil society, and development partners on the sidelines of the 2024 African Development Bank (AfDB) annual meetings to highlight the significance of credit ratings in shaping the development trajectories of African countries.

Ahunna Eziakonwa, assistant administrator of the United Nations Development Program (UNDP), said credit ratings play a significant role in improving economic growth by defining the cost of development financing.

“Africa requires innovative credit rating solutions to support the continent’s sustainable development agenda,” said Eziokanwa, also director of UNDP Regional Bureau for Africa.

Daouda Sembene, CEO of AfriCatalyst, a global development advisory, called for reforms to eliminate biases in credit rating methodologies that lead to higher borrowing costs for African countries.

Sembene added that credit ratings have a direct bearing on the cost of development goals and so African countries need to be better prepared as they seek increased market access to borrow commercial loans.

Raymond Gilpin, chief economist at the UNDP, highlighted the urgency for Africa to prepare for a future with declining official development assistance.

Gilpin noted that more countries across Africa are consistently looking for concessional funding, but the reality is that the region will be required to look for alternative sources of finance, which require use of credit ratings.

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