The event moved into a panel discussion, moderated by Ms Hannah Ryder, CEO of Development Reimagined. Panelists included Mr Babajide Sodipo, Executive Secretary, Alliance of African Multilateral Financial Institutions (AAMFI); Ms. Lucie Villa, Head of the Africa Sovereign and Multilateral Development Banks department, Moody’s Ratings; Hon. Jean-Paul Adam, Director for Policy, Monitoring and Advocacy in the Office of the Special Advisor on Africa to the UN Secretary-General; and Dr. Sifiso Falala, Founder and Chief Executive Director, Sovereign Africa Ratings.

The panel had six key takeaways:

1. Rating agencies need to distinguish liquidity stress from solvency risk, and scenario planning can help governments demonstrate resilience. Hon. Adam pointed to scenario planning as one of the most effective tools African governments have used in practice: “One of the best things that helped us with our credit ratings is by playing out scenarios, as they show the resilience that governments have in the face of challenges” — citing, as an example, how the impact of fuel price shocks on airfares and travel had been stress-tested this way.
2. African assets and repayment records perform better than prevailing risk perceptions suggest. Hon Adam cited comparative default data to challenge the assumptions embedded in current ratings: “Moody’s data has shown that as an asset class, African infrastructure projects have a default rate which is actually lower than that across the European Union – and half that of Latin America and the Caribbean.” He linked this to the incentives African governments face to remain current on their obligations, noting that “being locked out of the market is seen as a very high cost to pay, and therefore African countries will do everything in their power to actually make sure that they do service their debts”.

3. African Multilateral Financial Institutions face a “double penalty” that undermines the logic of multilateralism itself. Mr Sodipo described how AMFIs are penalised twice over: “the African operating environment is treated as high risk, which affects our portfolio quality and our financial strength, and we are also penalised for having African sovereigns as shareholders” – despite, in his words, “our financial institutions being globally competitive and well run.” He gave the example of an AAMFI member assessed in 2023: “one of our members was assessed in 2023 by one of the global rating agencies, which recognised strong shareholders, strong record, and willingness to contribute capital – but still assessed the shareholder support as low, because the weighted average sovereign rating of those shareholders was weak.” Rating agencies, he argued, “must learn to distinguish exposure to African risk from an inability to manage that risk.”

4. Rating divergence and mispricing carry a real, quantifiable financial cost. Mr Sodipo put a figure on the consequences, citing DR’s recent cost of disagreement analysis: “the cost of mispricing is real, and this kind of divergence costs us between US$ 200 to US$ 4450 million annually. This money can be channelled to education, health, and the continent’s development.” He added that UNDP has separately estimated that a more objective assessment of African sovereigns could save the continent almost as much as US$ 75 billion.
5. Governance and institutional trajectory shape ratings outcomes over the long term. Ms Villa illustrated this with a comparison of two African sovereigns: both were upgraded following sustained infrastructure investment and well-managed, affordable debt, including from MDBs, with one going on to show strong yields and real potential for investment grade. By contrast, she noted, “there is another country where we saw several years later that the debt of that government went much higher,” underscoring why “governance and institutions are important, as this gives us the comfort that there will be a positive impact in the long term.”
6. There is a need for greater transparency, African-owned rating capacity, and country-level rather than continental analysis. Hon. Adam called for “more transparency in terms of methodologies, so that there is better clarity in terms of what actually is being measured,” and pointed to digital tools and flow-mapping as underused levers for African countries to strengthen their own evidence base.

On the African Credit Rating Agency (AfCRA), Hon. Adam was clear that “the goal is rather to better prepare African countries for what being measured in terms of credit ratings actually means,” adding that “there should be more control about the narrative that African countries put out themselves.”

Dr. Falala noted that ratings should not be approached continentally at all: “I don’t think Africa should be rated. I think African countries should be rated.” He noted that Sovereign Africa Ratings’ own analysis shows “distinct patterns, the majority of which shouldn’t be there,” and that “the actual evidence of repayment is impressive,” pointing to scientific rating practice as the basis for a more accurate, country-specific approach.

This webinar sets the stage for the remaining five webinars in DR’s credit rating agencies series, which will continue to unpack the data, methodologies and institutional reforms needed to build a rating ecosystem that is wider in coverage, stronger in evidence, and better calibrated to Africa’s development realities.

To learn more, visit our Credit Rating Database, or read our Africa Disagreement Tax report.