Africa’s Borrowing Costs Remain High as G20 Talks Stall

A crucial opportunity to tackle the high cost of borrowing for African nations is slipping away at the G20. Under South Africa’s presidency, a push for fairer and more transparent credit ratings was a key goal, aiming to challenge the global agencies, such as Moody’s, S&P, and Fitch, which influence the high cost of borrowing for the Global South. Unfortunately, momentum has stalled, with South Africa failing to advance concrete reforms or establish a proposed commission. This inaction is particularly surprising given that the country has firsthand experience with the severe economic impact of rating downgrades. The result is a continued “hidden tax” on development, where African nations pay billions extra in interest, diverting funds from essential services such as education and health. To drive change, experts recommend that Pretoria champion African-led initiatives, such as the Africa Credit Rating Agency, as well as greater accountability for rating agencies in Africa.

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