How are the big three rating agencies impacting African countries?

This research paper examines the drivers and consequences of increased Eurobond issuance and sovereign credit ratings in Africa over the last decade, arguing that the 'big three' rating agencies exert significant influence over African debt costs while lacking accountability and local context.

• The number of African countries rated by the three major agencies (Moody’s, Fitch, and S&P) grew from 10 in 2003 to 31 in 2021, with the average number of annual credit ratings rising from 7 (1994-2007) to 37 (2008-2020).
• African governments have increasingly turned to Eurobonds—debt instruments in foreign currencies with tenures between 5 and 40 years—to reduce reliance on aid, finance infrastructure in energy and transport, and manage public debt.
• Most African countries have seen their sovereign credit ratings deteriorate since their first rating, which increases the cost of servicing debt. Interest rates on 10-year government bonds for African countries range from 5% to 16%, significantly higher than the near-zero or negative rates in the USA and Europe.
• The 'big three' rating agencies hold over 95% of the global market and are criticized for an oligopolistic nature, unreliable methodologies, and a lack of understanding of African economies, partly due to a minimal physical presence on the continent.
• The fear of credit downgrades has led some African governments to prioritize debt repayments over public health and economic recovery during the COVID-19 pandemic, utilizing tight macroeconomic policies that may hinder long-term growth.
• Rating agencies have assigned 'unsolicited' ratings—those not requested or paid for by the issuer—to several governments, including Ghana, Zambia, Namibia, Nigeria, and Tanzania, with Moody's assigning the highest number of these.

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} }