The African Development Bank (AfDB) has signed a $700,000 contribution agreement with Prosper Africa, a US initiative involving the President and the Treasury Department, to develop an online credit rating data platform.
This initiative aims to “reshape the way international investors assess risk in African markets” and strengthen the capacity of African countries to better engage with credit rating agencies, according to a statement received by APA on Monday.
The data platform will notably serve as a tool to improve information accessibility and fill data gaps, a recurring challenge that has led to a misperception of the risk of African economies. By reducing the gap between perceived and actual investment risks, it should contribute to “reducing the cost of financing” in African economies.
The project also aims to provide African countries with a better understanding of credit rating methodologies and provide them with analytical support to simulate credit ratings, thereby improving their interactions with agencies. This would support efforts to accurately reflect country risk on the continent to investors, according to the AfDB.
“The platform aims to provide high-quality, comprehensive and timely information as a public good, which is essential for evidence-based policymaking,” said Beth Dunford, AfDB Vice President for Agriculture, Human and Social Development, adding that the platform “will contribute to a more accurate representation and assessment of investment risks across the continent.”
Prosper Africa’s participation underscores its goal of strengthening strategic and economic ties between the United States and Africa by catalysing bilateral trade and investment flows.
Since 2023, the initiative has been working to “reshape investor perception of African markets,” including by focusing on sovereign credit ratings, which are affected by information asymmetries and missing data.
Under this agreement, the AfDB will host and manage the data platform, leveraging its expertise and network to ensure information quality.
ODL/te/sf/lb/as/APA