Nairobi city skyline with busy roads and urban development in Kenya.
Rating agency Fitch recently warned that the spread of the mpox virus in sub-Saharan Africa could increase fiscal pressures, particularly in countries like Nigeria, South Africa, and Kenya, where cases have been reported. However, critics argue that this alarm may be exaggerated, citing long-standing biases in how rating agencies assess African nations. Several studies suggest that African countries face disproportionate scrutiny from rating agencies, which tend to overstate risks. For example, agencies often rely on short visits and publicly available data, which can result in inaccurate ratings based on pessimistic assumptions. Critics highlight the need for a greater local presence and deeper engagement with African governments to provide fairer assessments. The African Union’s decision to establish an Africa Credit Rating Agency reflects growing concern about these biases, with advocates pushing for more regionally-based analysis to improve accuracy and fairness in sovereign risk evaluations.
SOURCE: EAST AFRICAN