Moody’s Investors Service said it focuses on the risk of default when determining debt ratings and that criticism of its assessments in Africa is unwarranted.
“I don’t accept the word that we are not fair,” Aurelien Mali, a Moody’s vice president and senior credit officer, said in an interview at the Africa CEO Forum in Abidjan, Ivory Coast.
“We use the same approach to calibrate the same risk. We have ratings in Africa that are comparable to ratings in Latin America, Eastern Europe, East Asia.”
At least 19 African nations are either at high risk of — or already in — debt distress, in part due to the fallout from the Covid pandemic and Russia’s invasion of Ukraine, according to the International Monetary Fund.
Many have sub-par investment grade ratings, which have pushed up their borrowings costs and some have been shut out of the debt markets altogether.
Ghana and several other countries have criticized ratings companies after being downgraded, and some have suggested that an African ratings agency be established to provide alternative assessments. In April, the United Nations Development Program said that a “more objective” ratings system could save African economies $74.5 billion.
“No one put a gun to the government saying you have to borrow,” Mali said. “After debt roadshows in a now-over era of easy credit and low rates, countries are now showing up to say: ‘We didn’t know it was difficult’” to secure credit, he said.
