The United Nations Economic Commission for Africa (ECA) has called for reforms to sovereign credit rating practices that, despite clear signs of macroeconomic resilience and structural reform across the continent, continue to undermine African countries’ access to affordable capital.

Outdated and inconsistent rating methodologies were contributing to disproportionately high borrowing costs for African nations, said ECA macroeconomics, finance and governance division director Zuzana Schwidrowski at the Africa Annual Credit Ratings Conference, in Cape Town, on May 21.

Only two African countries currently hold investment-grade ratings, which reflects not just fiscal challenges, but also systemic flaws in how major global credit rating agencies assess sovereign risk in Africa, she pointed out.

Issues include limited country coverage, lagging data and structural biases that fail to consider ongoing reforms and local economic fundamentals, she said.

“Africa’s development should not be held hostage by narrow perceptions of risk. Credit ratings are more than technical assessments. They shape the continent’s access to development finance, influence investor sentiment and directly affect the cost of capital.

“Improving sovereign and sub-sovereign credit ratings is not just about accessing capital markets, it is about building confidence, expanding fiscal space and unlocking the vast potential of domestic resource mobilisation,” she said.

Aligning credit rating improvements with broader structural transformation goals would multiply the impact of reforms and facilitate long term sustainable investment, Schwidrowski added.

Further, there is growing momentum across Africa to strengthen domestic creditworthiness and develop regionally embedded rating capabilities.

Coordinated efforts by central banks, finance ministries and regional institutions aim to improve debt transparency, broaden tax bases, reduce illicit financial flows and enhance statistical systems.

“Stronger credit ratings serve as a signal of economic stability and good governance, which are exactly the qualities sought by both international and domestic investors.

“We must build a new cycle of credible, positive ratings anchored in African leadership and supported by a fair, transparent global system,” she noted.

Additionally, at the institutional level, ECA continues to support countries in strengthening fiscal risk management, issuing local currency bonds and building resilient domestic capital markets.

These reforms are vital to helping African governments take ownership of their financial narratives and engage with rating agencies on fairer and more accurate terms, Schwidrowski said.