AfDB, US sign $700k deal to develop credit rating platform for African markets

The African Development Bank (AfDB) and Prosper Africa, a United States presidential initiative, have signed a $700,000 donor contribution agreement to develop a credit rating online data platform for African markets.

In a statement on Saturday, Beth Dunford, AfDB vice-president for agricultural, human, and social development, said the United States treasury department was also part of the agreement.

Dunford explained that the initiative would strengthen the analytical capacity of AfDB regional member countries (RMCs), aligning with the bank’s 10-year strategy.

“The platform will serve as a vital online data and analytical tool to address long-standing challenges in data accessibility, which have historically skewed risk perceptions of African economies,” she said.

”By bridging the gap between perceived and actual investment risks, the platform is expected to lower funding costs for the AfDB’s regional member countries (RMCs).

“The project will also enhance the analytical capacity of RMCs, helping them better understand credit rating methodologies and simulate credit ratings.

“The platform aims to provide high-quality, comprehensive, and timely information as a public good, which is critical to evidence-based policymaking.

“The platform will improve the evaluation of investment risks across Africa and will be accessible to sovereign entities, credit rating agencies, investors, and researchers.

“The initiative aligns with the AfDB’s Ten-Year Strategy (2024-2033) and its commitment to enhancing economic governance on the continent.”

According to Dunford, Prosper Africa’s participation reinforces its mission to strengthen economic ties between the United States and Africa by catalysing two-way trade and investment flows.

Dunford said the initiative has prioritised reshaping investor perceptions of African markets, particularly focusing on sovereign credit ratings since 2023.

The AfDB vice-president added that the bank would host and manage the platform, ensuring quality assurance and leveraging its extensive expertise in African economic data.

In December 2024, AfDB said African countries, including Nigeria, have collaborated to establish a continental credit rating agency to counterbalance Western credit rating agencies’ bias against Africa.