Inflated debt ratings ‘costing African countries billions’

Even when African countries have similar ratings to countries elsewhere, they end up paying more for debt, said former Senegalese economy minister Amadou Hott

Bank Group Ltd chief executive officer Sim Tshabalala described the added costs as 'preposterous' and 'unconscionable'. Picture: Tasos Katopodis/Getty Images for Prosper Africa

African countries face higher costs of financing because of inflated risk perceptions from credit-ratings companies, the head of the continent’s biggest bank said.

A United Nations Development Programme study last year showed that subjective risk assessments by ratings companies resulted in $75bn (€69.4bn) of added costs and foregone revenue by African countries, Standard Bank Group Ltd chief executive officer Sim Tshabalala said at a Future Investment Initiative Institute conference in Riyadh yesterday.