This Week in ESG and Impact Investing

  Credit rating agencies—Fitch, Moody’s, and Standard & Poor’s—are among the most powerful institutions in global finance. Their evaluations affect everything from borrowing costs and investor confidence to the fate of national economies. However, a stark contrast in how these agencies rate African nations versus Western powers, particularly the United States, reveals troubling evidence of systemic bias embedded in the international credit rating regime. The Disparity: African Ratings vs. U.S. Ratings Ghana, Kenya, and Nigeria have received some of the lowest ratings on the credit spectrum. As of 2025: Ghana is rated RD (Restricted Default) by Fitch, SD (Selective Default) by S&P, and Ca by Moody’s. Kenya holds a B or B3 rating—deep in speculative territory. Nigeria hovers just above default at B- or Caa1. Meanwhile, the United States still retains ratings like AA+ (Fitch and S&P) and Aaa (Moody’s), placing it in the safest investment category. This remains the case des...

  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-...

Members of Congress held the third in a series of hearings on the financial crisis titled “Credit Rating Agencies and the Financial Crisis.” The hearing, held on Wednesday in 2154 Rayburn House Office Building, examined the roles and responsibilities of credit rating agencies in the current financial turmoil. Top credit rating agency executives also testified before the House Committee on Oversight and Government Reform. In his opening statement, Committee Chairman Henry Waxman briefly outlined the sequence of events which lead to today’s crises. “The story of the credit rating agencies is a story of colossal failure,” Mr. Waxman said. He pointed out that leading credit rating agencies are essential financial gatekeepers. However, the agencies assigned triple-A ratings to securities and CDOs backed by risky subprime mortgage loans. As a result, the entire financial system is now at risk. The three largest credit rating agencies - Standard & Poor’s, Moody’s, and Fitch Ratings contro...