Photos: YouTube Screenshots
The African Union’s planned credit agency could unlock the necessary capital to develop the digital infrastructure needed to transform countries across Africa, two of the continent’s top bankers told Semafor Africa.
The AU planned to launch the agency this year but announced in July that it would not be fully operational until 2025.
African Development Bank President Akinwumi Adesina, speaking at The Next 3 Billion summit, said the cost of raising capital in Africa is “three to four times” higher than in other parts of the world. “This is based on risk, but mainly in terms of perceived risk,” he said. “Well, I’m sorry your perception is not my reality.”
Adesina said the AU’s agency would “actually provide a counterfactual to existing credit agencies so that Africa’s risk is properly addressed — whether it’s market risk, financial risk, political risk — is properly addressed.”
Standard Bank CEO Sim Tshabalala, agreed there was a risk perception premium but said the AU agency’s success would depend on transparency and the sophistication of the models used to determine ratings.
“If all that agency did was to replicate what current rating agencies do, it’s hard to see its competitive advantage,” he said.
