Chairman of the Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration, Raymond Nazar says poor Credit Rating has become a limiting factor for African states to access the international capital markets for public investment and funding of national budgets.
Mr Nazar said this during the 5th Ordinary Session of the Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration in Lusaka today.
Mr. Nazar said the Credit Rating Agencies have become gatekeepers to African accessing capital and that African countries are less likely to be upgraded compared to other regions, especially with the onset of COVID-19 which has seen 21 countries being downgraded and only 2 being upgraded.
“Unfavorable credit rating or a negative rating outlook has the potential to undermine growth and economic stability. Historically, African Sovereigns are mostly less likely to be promoted from the B into the BB category compared to other regions even after accounting for improvements in the macro fiscal environment and the willingness of African governments to service debt” he said.
He has since tasked the STC to come up with policy options geared towards accelerated economic recovery through creating cheaper sources of funding including reduction of the influence of the existing credit rater.
Mr. Nazar further tasked the committee to come up with policy options that will help to crack down Illicit Financial Flows IFFs, which he says denies Africa about US$80 billion yearly as reported in the 2020 United Nations Conference on Trade and Development UNCTAD report.
“Furthermore, aged old challenges i.e Illicit Financial Flows that denies Africa of some US$80 Billion yearly per the 2020 UNCTAD report as well as climate change.” he added.