How are the big three rating agencies impacting African countries?

The paper examines the rise of Eurobond issuance in Africa as governments seek alternatives to aid, noting that sovereign credit ratings from Moody’s, Fitch, and S&P are essential for market access. It finds that most African countries' ratings have deteriorated since their first assessment, leading to higher borrowing costs and prioritizing debt repayment over human rights and health during the COVID-19 pandemic. The authors criticize the 'big three' for their oligopolistic nature, unreliable methodologies, and limited physical presence in Africa, recommending increased regulation, accountability, and transparency in how Eurobond funds are utilized.

• The number of African countries rated by Moody’s, Fitch, and Standard & Poor (S&P) grew from 10 in 2003 to 31 in 2021, while the average annual number of ratings rose from 7 (1994–2007) to 37 (2008†20).
• Most African countries, particularly those issuing Eurobonds, have seen their sovereign credit ratings deteriorate compared to their initial ratings, which increases the cost of servicing debt.
• African countries face significantly higher borrowing costs than other regions, with 10-year government bond interest rates between 5% and 16%, compared to near-zero or negative rates in the USA and Europe.
• Fear of credit rating downgrades led some African governments to prioritize debt repayments over public health and economic recovery during the COVID-19 pandemic, employing tight macroeconomic policies that may hinder long-term growth.
• The 'big three' rating agencies exhibit a limited physical presence in Africa, with S&P and Moody’s each having only one office in Johannesburg and Fitch having no offices on the continent.
• The 'big three' agencies hold over 95% of the global credit rating market and have been accused of issuing unsolicited ratings for countries including Ghana, Zambia, Namibia, Nigeria, and Tanzania.

APA

Chirikure, N., & Chelwa, G. (2022). How are the big three rating agencies impacting African countries? Africa Policy Research Institute. https://afripoli.org/how-are-the-big-three-rating-agencies-impacting-african-countries-54

Chicago

Chirikure, Nora, and Grieve Chelwa. How are the big three rating agencies impacting African countries? Africa Policy Research Institute, 2022. https://afripoli.org/how-are-the-big-three-rating-agencies-impacting-african-countries-54.

Wikipedia

{{cite report |last1=Chirikure |first1=Nora |last2=Chelwa |first2=Grieve |title=How are the big three rating agencies impacting African countries? |publisher=Africa Policy Research Institute |date=19 April 2022 |url=https://afripoli.org/how-are-the-big-three-rating-agencies-impacting-african-countries-54 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chirikure2022how, author = {Chirikure, Nora and Chelwa, Grieve}, title = {{How are the big three rating agencies impacting African countries?}}, institution = {Africa Policy Research Institute}, year = {2022}, month = apr, url = {https://afripoli.org/how-are-the-big-three-rating-agencies-impacting-african-countries-54}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }