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Africa: Africa's Borrowing Costs Are Too High – the G20's Missed Opportunity to Reform Rating Agencies

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One of the commitments the South African presidency of the G20 made in its policy priorities document at the beginning of 2025 was to push for fairer, more transparent sovereign credit ratings. And to address the high cost of capital caused by an illusive perception of high risk in developing economies.
South Africa proposed to establish a commission to look into the cost of capital. In particular, to investigate the issues that impair the ability of low- and middle-income countries to access sufficient, affordable and predictable flows of capital to finance their development.
Read more: Rating agencies don’t treat the Global South fairly: changes South Africa should champion in G20 hot seat
For many in Africa, this was more than a bureaucratic statement. It represented the first real chance for countries in the global south to challenge the entrenched power of international credit rating agencies through the G20. Through the influence of their opinions, Moody’s, S&P Global Ratings and Fitch Ratings are at the centre of driving the high cost of borrowing in Africa.
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But the window of opportunity for advances to be made on this are narrowing. The South African government and the country’s business community have not used the opportunity provided by the G20 presidency to press for reforms that could reduce Africa’s borrowing costs and strengthen its financial sovereignty.
Why credit ratings matter so much
Credit rating agencies are not neutral observers of financial markets. Their judgements directly shape investor sentiment, access to finance and the interest rates countries pay when issuing bonds.
For developing countries, especially in Africa, ratings determine whether a government spends its scarce resources on debt servicing or on development needs such as schools and hospitals.
The problem is not just the ratings themselves but the inaccuracy and subjectivity of how they are determined.
Developing economies have frequently complained about several rating challenges.
First, African countries are more likely to be given rating downgrades that aren’t supported by economic fundamentals than countries in other regions.
Second, subjective risk factors are applied by pessimistic rating analysts who are based outside the continent.
Read more: Rating agencies and Africa: the absence of people on the ground contributes to bias against the continent – analyst
Third, developing economies are penalised on the basis of the speculative impact of external shocks such as global pandemics or climate-related disasters.
Lastly, there are significant variations in the weights allocated to risk factors in Africa compared to peer countries with relatively similar risk profiles in Asia and Latin America.
A missed leadership opportunity
The G20 remains the key global forum where both the major advanced economies and the most influential developing economies sit together. As chair, South Africa has the power to shape the agenda, shape working groups and drive communiqués that influence global discourse.
But so far, the proposed cost of capital commission has not been established. It is fair to assert that South Africa’s G20 presidency has not used this platform to redress the cost of capital issue. Its engagements on credit rating reform have been limited to reiterating talking points. There’s no evidence of structured proposals dedicated to the issue.
This inaction is surprising given that South Africa itself is no stranger to the sharp end of credit rating decisions. In the past eight years, a series of downgrades by the international rating agencies pushed the country’s debt deep into “junk” status. These decisions have raised borrowing costs and dented investor confidence. Pretoria therefore has both experience and legitimacy to lead a reform conversation on sovereign ratings.
In addition, South Africa’s corporate and financial sector – its banks, insurers and institutional investors – have remained largely on the sidelines.
Platforms such as the Cost of Capital Summit, convened by the Business (B20) working group, Standard Bank, Africa Practice and the African Peer Review Mechanism, were useful. But South Africa’s business community has failed to seize its country’s G20 presidency as a lever to press for reforms that would benefit not only domestic firms but also African partners.
Lower sovereign borrowing costs in host countries, for example, would directly reduce macroeconomic risks for South African corporates operating across the continent and expand their investment opportunities.
What could have been done
Three concrete steps could bring the issue of credit rating reform back onto the agenda.
Read more: Africa’s new credit rating agency could change the rules of the game. Here’s how
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The cost of inaction
According to UNCTAD, developing countries pay interest rates up to three percentage points higher than peers with similar fundamentals, amounting to billions of dollars annually in excess costs.
This “hidden tax” on development has direct human consequences. Fewer resources for infrastructure, climate adaptation, health systems and education. For Africa, where financing needs are immense, more accurate credit ratings could unlock vital fiscal space.
South Africa cannot afford to let its G20 presidency drift into symbolism. The promise of “fairer, more transparent” sovereign credit ratings must be translated into action, through task forces, communiqués and alliances that advance reform.
Pretoria also needs its business sector to step up. This is not only a moral imperative. It’s also an economic one.
Lower risk premium and fairer access to capital will expand opportunities across the continent, including for South African investors. The world is watching. If South Africa fails to lead, it will confirm suspicions that rhetoric about reforming the global financial architecture is little more than lip service. If it seizes the moment, however, it could leave a legacy far greater than its own domestic struggles. The beginning of a fairer, more accountable system of sovereign credit ratings for the global south.
Misheck Mutize, Post Doctoral Researcher, Graduate School of Business (GSB), University of Cape Town
This article is republished from The Conversation Africa under a Creative Commons license. Read the original article.
AllAfrica publishes around 500 reports a day from more than 110 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
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Africa: Gambia Slip to Guinea Bissau in Wafu a U-17 Cup of Nations Starter

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The Gambia on Sunday lost to Guinea Bissau 2-0 in their opening match of the 2025 WAFU A U-17 Cup of Nations played at the Stade Mamadou Konateh.
The Baby Scorpions made an astonishing start to the match and contained Guinea Bissau in the midfield, crafting several goal scoring opportunities.
Bisenty Mendy could have opened the scores for The Gambia twice in the first half but his shots went away.
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Alieu Drammeh also came very close to opening the scores for the Baby Scorpions during the first half but his shot went over the cross bar.
Guinea Bissau opened the scores before half time.
The Gambia reacted quickly for an equaliser and created goal scoring opportunities but were wasteful in front of goal thus the first half ended 1-0 in favour of Guinea Bissau.
Upon resumption of the match, The Gambia injected in several fresh legs to fancy their chances of levelling the scores.
The Baby Scorpions mounted heavy pressure on Guinea Bissau and created many goal scoring opportunities but failed to capitalise on them.
Guinea Bissau scored their second goal in the dying minute of the match to dart The Gambia’s hopes of coming back to their feet.
The Gambia fought hard for an equaliser and piled heavy pressure on Guinea Bissau, creating goal scoring chances but failed to materialise on them thus the match ended 2-0 in favour of Guinea Bissau.
The win earns Guinea Bissau second-place in Group A of the 2025 WAFU A U-17 Cup of Nations with 3 points in one group match.
The Baby Scorpions occupy third-place in Group A of the sub-regional cadet biggest football fiesta without a point after one group match.
The Gambia need to beat Liberia in their second group match on Wednesday to increase their chances of cruising to the semi-finals of the 2025 WAFU A U-17 Cup of Nations.
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Read the original article on The Point.
AllAfrica publishes around 600 reports a day from more than 110 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
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AllAfrica is a voice of, by and about Africa – aggregating, producing and distributing 600 news and information items daily from over 110 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Johannesburg, Nairobi and Washington DC.
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Africa: AUC Chairperson Received H.E. Ruslan Nasibov, Ambassador of the Republic of Azerbaijan

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Last week, the Chairperson of the African Union Commission, H.E. Mahmoud Ali Youssouf, received H.E. Ruslan Nasibov, Ambassador of the Republic of Azerbaijan to Ethiopia & Permanent Representative to the AU.
They exchanged on strengthening Africa-Azerbaijan relations. The Chairperson commended Azerbaijan’s constructive diplomacy and efforts toward peace, including in its region.
Ambassador Nasibov congratulated the Chairperson on his election and conveyed his country’s continued support, as well as a personal invitation from President Ilham Aliyev to visit Azerbaijan and participate in the World Urban Forum in Baku next year.
Read the original article on African Union.
AllAfrica publishes around 600 reports a day from more than 110 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
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Africa: Women's Leadership Role in Peace and Security Issues 'Going in Reverse', UN Chief Warns

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More women must have a role in shaping peace agreements, security reforms and post-conflict recovery plans, UN Secretary-General António Guterres told the Security Council on Monday.
Members met for their annual open debate on the women, peace and security agenda just ahead of the 25th anniversary of the Council’s landmark resolution 1325 (2000) on the issue.
As the Secretary-General noted, the resolution “gave voice to a simple truth: women’s leadership is central to just and lasting peace“, in addition to inspiring countless other resolutions, reports and roundtables.
World falling short
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“But let’s speak frankly,” he said. “Too often, we gather in rooms like this one – full of conviction and commitment – only to fall short when it comes to real change in the lives of women and girls caught in conflict.”
In a recent report, Mr. Guterres highlighted progress made over the past quarter century, which includes more than 100 countries adopting national action plans on women, peace and security.
“But gains are fragile and – very worryingly – going in reverse,” he warned.
“Around the globe, we see troubling trends in military spending, more armed conflicts, and more shocking brutality against women and girls.”
Conflict, sexual violence and harassment
Last year, some 676 million women worldwide lived within 50 kilometres of deadly conflict events – the highest number in decades, he said.
Sexual violence also surged, with a 35 per cent rise in incidents against girls. In some places, they accounted for nearly half of all victims.
Mr. Guterres highlighted how women in public life such as politicians, journalists and human rights defenders, are being targeted with violence and harassment, before turning to the situation in Afghanistan where “the systematic erasure of women and girls from public life is in overdrive”.
Additionally, women and girls in the Occupied Palestinian Territory, Sudan, Haiti, Myanmar and beyond, face grave risks and horrific levels of violence.
“And while women’s organizations remain lifelines for millions in crisis, they are being starved of resources,” he added, citing a recent survey by UN Women, which champions gender equality globally.
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It revealed that 90 per cent of local women-led groups in conflict settings are in dire financial straits, with nearly half expected to shut down within six months.
Support women’s organizations
The Secretary-General urged UN Member States to accelerate commitments on women, peace and security, in line with the Pact for the Future adopted last year. He outlined areas for action, including ramping up funding for women’s organizations in conflict-affected countries.
He also stressed the need for greater participation by women who “must be at the table – not as tokens, but as equal partners“, as well as accountability for perpetrators of gender-based violence, including conflict-related sexual violence.
Refocus, recommit and deliver
Sima Bahous, Executive Director of UN Women, was adamant that the 25th anniversary of resolution 1325 “must be more than a commemoration.”
“Women and girls who live amidst conflict deserve more than commemoration,” she said. “It must instead be a moment to refocus, recommit, and ensure that the next 25 years deliver much more than the last.”
he noted that the meeting was taking place against the backdrop of the war in Gaza, where “a glimmer of hope emerges”, and she welcomed the positive responses to US President Donald Trump’s plan to end the fighting.
Looking ahead to the next 25 years for the women, peace and security agenda, Ms. Bahous told the Council it was crucial to have more funding earmarked, robust quotas and more accountability “that make failures visible”.
More to follow…
Read the original article on UN News.
AllAfrica publishes around 600 reports a day from more than 110 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
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AllAfrica is a voice of, by and about Africa – aggregating, producing and distributing 600 news and information items daily from over 110 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Johannesburg, Nairobi and Washington DC.
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