Pretoria\u2019s finance minister says Western assessments fail to reflect the continent\u2019s economic fundamentals<\/p>\n
Major global rating agencies have demonstrated a \u201cbias\u201d against African countries by giving them lower credit scores compared to peers with similar fiscal metrics, South Africa\u2019s finance minister has told Bloomberg.
\nEnoch Godongwana\u2019s comments come a day after he delivered a budget with an improved fiscal outlook; however, he told the outlet he\u2019s not holding his breath for a rating upgrade.
\n\u201cMy sense is that it\u2019s not a foregone conclusion\u2026 It\u2019s going to be a bonus if they give us a better rating,\u201d he said in an interview ahead of the latest review from S&P Global Ratings.
\nS&P currently rates South Africa\u2019s long-term foreign debt at BB minus, three notches below investment grade, and has kept a positive outlook since November last year, signaling the possibility of an upgrade. Rival ratings agencies Moody\u2019s and Fitch also classify the country\u2019s debt as sub-investment grade.
\nGodongwana said the agencies \u201care behind the curve,\u201d insisting that South Africa\u2019s improved debt trajectory over the past five years is not fully reflected in their assessments. He noted that \u201ccountries with the same fiscal metrics get a better rating than Africans,\u201d despite relatively low default rates on the continent.
\n\u201cIt may not be conscious,\u201d he said, but \u201cthere is already a bias against the African continent by multinational institutions, by the investing community, by rating agencies.\u201d\u00a0<\/p>\n
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An expert panel report to next week\u2019s G20 summit in Johannesburg will provide \u201cdata to prove that,\u201d the minister added.
\nAs a result of lower ratings, African governments pay far higher borrowing costs than countries in other regions, according to data cited by Bloomberg. The average yield on dollar-denominated sovereign bonds from sub-Saharan Africa stands at 9.1%, above the 6.5% in Latin America and almost double the 4.7% in emerging Asia. Of the ten sovereigns with the world\u2019s highest spreads, six are African states, including Senegal, Gabon, Mozambique, Cameroon, Angola and the Republic of Congo.
\nGhana and Zambia have also previously criticized global rating firms, saying downgrades scare off investors and worsen their access to credit. In 2023, Ghana\u2019s then-leader Nana Akufo-Addo said the agencies\u2019 \u201creckless behavior\u201d had worsened the country\u2019s financial difficulties.<\/p>\n","protected":false},"excerpt":{"rendered":"
Pretoria\u2019s finance minister says Western assessments fail to reflect the continent\u2019s economic fundamentals Major global rating agencies have demonstrated a \u201cbias\u201d against African countries by giving them lower credit scores…<\/p>\n","protected":false},"author":1,"featured_media":22560,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[4,6,3],"tags":[],"class_list":["post-22559","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-environment","category-politics"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t