Dr. Yemi Kale, Group Chief Economist at Afreximbank, has attributed the high cost of borrowing in African countries to flawed and biased international credit rating systems. Speaking at the launch of the African Trade Report 2025, Kale explained that global rating agencies often use models that misrepresent African economies, inflating perceived risks and increasing lending costs. He advocated for the creation of an African-centred rating agency that better reflects the continent’s economic realities, similar to what already exists in other regions like Asia.
Kale also recommended alternative funding strategies to reduce Africa’s dependency on Eurobond markets, where unfair ratings often lead to inflated interest rates. He suggested strengthening partnerships with friendly nations like China and increasing contributions to African multilateral banks to build internal financial resilience. Kale emphasized the importance of domestic financial institutions and urged African nations to explore diverse capital-sourcing avenues beyond the traditional global markets.
Despite global economic turbulence, Kale affirmed Africa’s relative resilience, pointing out that limited integration with global financial systems has insulated the continent from some external shocks. He noted encouraging trends such as rising intra-African trade, citing Nigeria’s milestone of trading more with African nations than with other regions. The African Trade Report 2025 offers strategic insights and policy guidance to help African economies navigate a changing global financial landscape.
