At the Bloomberg Africa Business Summit in Johannesburg, senior executives from Africa’s largest banks issued a stark warning: global debt markets are systematically overcharging African nations, undermining growth and draining scarce public resources. The executives argue that the problem lies not in the fundamentals of African economies, but in how international credit rating agencies and capital markets continue to perceive and price risk across the continent.
Sim Tshabalala, Chief Executive of Standard Bank Group, described the borrowing costs faced by African governments in global markets as “scandalous” and economically destructive. He noted that the additional premiums being paid by African countries—compared to similarly placed nations in other regions—cost the continent approximately two percentage points of GDP every year. “This is not simply a matter of market dynamics,” he said. “It is about flawed perceptions that translate into real, measurable harm.”
Tshabalala was joined on the panel by Kenny Fihla, Chief Executive of Absa Group, and Roosevelt Ogbonna, Chief Executive of Access Bank, both of whom expressed similar frustration over how global markets assess and price African credit. While acknowledging structural challenges that do exist, they emphasised that many African nations have made substantial progress in areas such as fiscal consolidation, inflation targeting, and debt transparency—yet these improvements are rarely rewarded with better financing terms.
Many countries across the continent have enacted macroeconomic reforms aimed at enhancing transparency and improving governance. In Ghana, Kenya, Senegal, and Rwanda, for example, governments have implemented medium-term expenditure frameworks, adopted inflation-targeting regimes, and increased public access to fiscal data. These measures are aligned with international best practices, and in some cases have been supported by multilateral institutions such as the International Monetary Fund (IMF) and the African Development Bank (AfDB). Yet these efforts have not consistently translated into improved credit ratings or reduced risk premiums.
Instead, African sovereigns remain among the most expensive borrowers in the world, even when they exhibit more sound macroeconomic management than peers in other regions. According to research by the United Nations Economic Commission for Africa (UNECA), African countries are often charged 5 to 6 percentage points more in bond markets than non-African emerging economies with comparable or weaker economic indicators. These higher premiums cost African nations billions of dollars annually—funds that could otherwise be used to invest in health, education, energy, and critical infrastructure.
Bank executives at the summit argued that the persistent misalignment between perceived and actual risk stems from outdated methodologies used by international credit rating agencies. These methodologies, they said, frequently overemphasise historical volatility, political risk, or commodity dependence, while undervaluing institutional resilience, reform momentum, and demographic advantages. The result is a risk assessment framework that is often static, incomplete, and biased against African issuers.
Ogbonna, of Access Bank, stressed that the current frameworks not only distort risk pricing but actively restrict access to long-term investment capital for African governments and firms. “We are not asking for charity,” he said. “We are asking for fairness and for the world to judge Africa based on evidence, not outdated narratives.” He called for a “wholesale recalibration” of how global markets and institutions assess sovereign credit risk on the continent.
The implications of these distortions are far-reaching. Unfair pricing discourages private investment, reduces fiscal space for social and infrastructure spending, and forces governments to rely more heavily on concessional finance or domestic borrowing at the expense of long-term development goals. As the continent navigates post-pandemic recovery, climate adaptation, and digital transformation, access to affordable finance is more critical than ever.
There is increasing recognition among African policymakers, economists, and researchers that the solution must include both technical and political reforms to the global financial architecture. Proposals range from increased representation of African voices in rating agencies and Bretton Woods institutions, to the creation of independent African-led credit rating mechanisms that reflect local realities and priorities.
At the same time, the momentum for reassessing Africa’s financial narrative is gaining ground among investors and development partners. Institutions such as the African Union and the African Development Bank continue to call for more inclusive frameworks that integrate economic opportunity alongside traditional measures of risk.
What is at stake, executives argued, is more than just lower borrowing costs—it is Africa’s ability to shape its own development path on equitable terms. With a young, rapidly urbanising population, expanding technological capacity, and increasing regional integration through the African Continental Free Trade Area (AfCFTA), the continent has the foundations for long-term growth. But to unlock this potential, it must be allowed to participate in global capital markets without being structurally penalised for its geography.
As global investors seek new frontiers and long-term returns, Africa presents opportunities that can only be realised if capital is allocated based on a fair and forward-looking assessment of risk. The summit concluded with a clear message: reforming how African nations are assessed and financed is not just an economic imperative—it is a matter of global justice.
