Impact of Credit Rating Agencies on Development Finance in Africa. 14 April 2023. Ntsetselelo Dlamini, Intern, Skidmore College.

In the backdrop of the IMF/World Bank Spring Meetings, the Brookings Africa Growth Initiative (AGI), AfriCatalyst and the UNDP’s Africa Bureau hosted a high level panel discussion about the impact of credit ratings on African development. Panelists included Ghana’s Minister of Finance Ofori-Atta, Senegal’s Minister of Economic Planning Oulimata Sarr and the President of the Eastern and Southern Africa Trade and Development Bank Admassu Tadesse.

At the IMF/World Bank Meeting in 2017, Economist and Creative Investment Research CEO William Michael Cunningham raised concerns about discrimination and misadjusted risk attitudes towards the continent. It is encouraging to see that this conversation is finally receiving the attention it deserves. The panelists agreed that there is a need for reform in credit rating agencies' relationship with African sovereign states. They also highlighted the severe consequences of downgrades in credit ratings on African countries, hindering much-needed development.

Of course the meeting would not have been complete without an overview of some potential solutions. Seeking non-western sources of finance, establishing Africa-based credit rating agencies and encouraging central banks to hold a certain fraction of reserves within the continent were some answers that stood out to me.

As a young African student of Economics, I was particularly intrigued by the prospect of establishing Africa based credit rating agencies. Such agencies could provide a more accurate reflection of the true risk that sovereign African states face. However, they will need to be completely transparent to maintain credibility and solve the problem at hand. Transparency in the assumptions made through the Big Three (Moody's, Standard and Poor's and Fitch) credit rating agencies' methodology leaves much to be desired, making this an important issue that deserves attention.

Maternal Health Financing Facility for Black Women: A Solution to an Urgent Problem

Maternal mortality is a significant issue in the United States, with Black women disproportionately affected. Research conducted by the Centers for Disease Control and Prevention (CDC) has shown that Black women are more likely to die from pregnancy-related causes than their white counterparts. However, the issue is not new, and despite the increasing amount of data available, the disparities have remained unaddressed for far too long. Creative Investment Research (CIR) is among the organizations that believe there is a solution to the problem. Through our proposed impact investing vehicle , the Maternal Health Financing Facility for Black Women (MHFFBW), we aim to tackle the mortality gap and support Black women during childbirth, which will, in turn, benefit their communities. The Facility, based on legally binding financing agreements containing terms and conditions that direct resources to individuals and institutions capable of addressing supply-side conditions at the heart of

BRICS Summit 2023: Navigating the Transformation of Global Finance

Recent developments in the global financial landscape have captured the attention of the finance world, promising a new era of integration, transformation, and collaboration. Amidst the excitement, however, it is essential to acknowledge the formidable obstacles that stand in the way of realizing these ambitions. The 2023 BRICS Summit , slated to convene amidst this shifting landscape, is poised to be a significant juncture that could have profound implications for the future of international finance. The resurgence of Bitcoin, marked by an impressive, if smaller, year-to-date price surge, has underscored its enduring relevance. Similar concerns surround the exploration of central bank digital currencies (CBDCs). The UK's digital pound initiative, while forward-looking, raises questions about stability, security, and privacy and potential economic power imbalances. The notion of a BRICS digital currency, potentially extended to include several countries, reflects a desire to chall

Projected Impact of Gun Laws on Corporate Profits in Texas

More Fortune 500 companies are located in Texas than in any other state. Texas successfully used low taxes and minimal regulations as bait to recruit companies like Tesla and Oracle. The state promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and spend policies of liberal leadership" in Democrat-run states. Four million people migrated to Texas over the past ten years. Our economic models predict a reversal, however. State of Texas corporations on the Fortune 1000 list generate $2.2 trillion in revenue, $158 billion in profit. They have a market value of $3.8 trillion and employ 2.5 million people nationwide. We continue to believe this increased corporate presence in Texas imposes a tax on the nation as a whole. Texas allows anyone 21 or older to carry handguns without training or licenses, and maintains lower gun purchase age limits. Beyond the recent abortion bill, which allows people to sue those who "aid and abe

This Week in ESG and Impact Investing

Search This Blog