The African Union has elected Mahamoud Ali Youssouf of Djibouti as the new Chairperson of the AU Commission, just 24 hours after launching its own credit rating agency, the African Credit Rating Agency (AfCRA).
Youssouf defeated Odinga Odinga of Kenya in the fourth round of voting. He will succeed Moussa Faki Mahamat of Chad, who served two terms of four years each.
Bayo Onanuga, special adviser on information and strategy to President Bola Tinubu, remarked that Youssouf’s victory surprised Odinga, who had been expected to win.
Onanuga noted that Odinga spent three out of his five allotted minutes discussing the history of Pan-Africanism and African solidarity, and had not addressed his vision when the electronic timer cut him off.
“In contrast, Youssouf sounded more convincing when presenting his vision,” Onanuga wrote on his X handle on Saturday. He added that although Odinga had initially led in the first round, he lost votes even after the third candidate from Madagascar withdrew.
The African Credit Rating Agency
On Friday, the African Union announced the launch of its own rating agency, the African Credit Rating Agency (AfCRA), to address biases by global rating firms. Kenya’s President William Ruto unveiled the new agency at an AU event held in Addis Ababa, Ethiopia.
“Global credit rating agencies have not only dealt us a bad hand, they have also deliberately failed Africa,” Ruto stated during the launch. A study by the Africa Peer Review Mechanism and the United Nations Development Programme highlights that biased grading has cost Africa a staggering $75 billion in lost opportunities.
The African Union has previously criticized global rating agencies’ characterization of African economies. In January, the AU pointed out that Moody’s Ratings’ fluctuating assessment of Kenya’s outlook was flawed.
What you should know
“As the continent continues its march towards economic integration and resilience, the establishment of the African Credit Rating Agency (AfCRA) represents a pivotal step in asserting Africa’s position on global financial governance,” Ethiopia’s ENA news agency reported.
- AfCRA aims to provide fair, transparent, and development-focused credit ratings that reflect the realities and potential of African economies.
- The idea of creating an African credit rating agency has been in the pipeline for years. In September 2023, the AU officially announced its plans to move forward with the project.
- This decision comes after repeated criticism of the “Big Three” rating agencies—Moody’s, Fitch, and S&P—accused of applying a “negative bias” when assessing African economies.
- Critics argue that these ratings often lead to higher borrowing costs for African countries and, in some cases, make it harder for them to access international financial markets.
