President Bola Tinubu urges fairer global credit system, citing Africa’s high borrowing costs and supports a continental credit rating agency

President Bola Tinubu has called for a fairer global financial system, asserting that African countries face disproportionately high borrowing costs due to persistent misjudgements by dominant international credit rating agencies.

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In an opinion article, Tinubu said Africa is “paying too much to borrow” and argued that ending the so-called “Africa premium”—the gap between ratings and actual economic conditions—could no longer be ignored.

He criticised the influence of the three major credit rating agencies—Fitch, Moody’s, and S&P Global Ratings—saying their assessments shape investor behaviour yet often fail to accurately reflect local realities.

“Their judgements shape investor behaviour, yet they consistently misjudge African risk,” Tinubu wrote.

The president cited a 2023 United Nations Development Programme report which found that distortions in credit ratings cost Africa about $75 billion annually through excess interest payments and lost lending opportunities.

He noted that only three African countries currently hold investment-grade ratings, despite International Monetary Fund projections that the continent will be the world’s fastest-growing region this year.

Tinubu backed the creation of an African credit rating agency as a “necessary corrective,” highlighting the lack of on-the-ground presence of global agencies.

He warned that ratings often rely on subjective assessments of political risk and institutional strength, which may fail to capture local economic realities.

“Downgrades then become self-fulfilling, raising borrowing costs and straining public finances,” he said, noting that commodity-dependent economies are particularly vulnerable when global prices fall, even if fiscal buffers remain strong.

While supporting a continental agency, Tinubu stressed it must build credibility with timely, transparent data.

He pointed to Nigeria’s recent credit upgrades, citing reforms such as rebasing GDP, publishing detailed budget documents, removing fuel subsidies, and liberalising the exchange rate, which have supported non-oil growth.

“Slow upward adjustments are commonplace across Africa, especially when set against the speed of downgrades,” Tinubu noted. He added that smaller countries with less market visibility bear the costs most heavily.

The president argued that a continental ratings agency could signal reform momentum in real time, helping African nations compete on a level playing field and access international markets promptly after implementing tough policy measures.

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“Africa’s success is not a regional concern but a global opportunity,” Tinubu wrote, observing that by mid-century the continent will account for a quarter of the world’s working-age population.