AFRICAN countries should speed up the process of operationalising the African Credit Rating Agency whose implementation will leverage the continent’s opportunity in the global financial architecture, says President Hakainde Hichilema.
President Hichilema said Africa should not shy away from the fact that the continent has not been treated fairly in the global finance world and it was time Africa spoke for itself to redress the imbalance that has been going on for a long time.
He said there was need to undertake practical steps to redress the situation which would require political commitment and walk in the realisation of the creation of the African Credit Rating Agency.
Mr Hichilema said African countries have had to pay high costs especially when it came to short term capital which was crippling and damaging viable businesses.
President Hichilema was speaking during a Presidential Breakfast on the African Credit Rating Agency whose theme was Securing Africa’s Financial Future and was organised by the African Peer Review Mechanism at the African Union (AU) headquarters in Addis Ababa, Ethiopia.
“Let’s say other things are equal, other things being equal, and the only thing you are left to assess the viability of the project is the cost of capital.
Many times, that project will not see the light of the day because that variable called the cost of capital is too high. Compare that project on our continent with another project in the different continents,” President Hichilema said.
He said it was contrasting that in Africa, businesses failed on account of the cost of viable business capital as the continent’s economies were down owing to the cost of capital.
President Hichilema said the actualisation of the African Credit Rating Agency has come at a better time so that some of the challenges are addressed to make investment meaningful.
“I’m focusing on investment expenditure, projects that will lead to growth of our economies, and not just growth but accelerated growth so we can create jobs for our youthful population on the continent, number one.
Further there is a need to create business opportunities in the supply chain for public sector, private sector, micro, small, medium, large businesses.
I think these are the issues we must be conscious of as to what is the motivation which has brought us to this breakfast meeting,” Mr Hichilema pointed out.
President Hichilema cited the drought that affected the country, saying had Zambia made the right decisions such as investment in irrigation to produce more food and generate enough power, it would have averted its consequences.
He said the continent must be expansionary in mind and not allow restrictions if bigger projects are to be realised.
“And we recognised that we needed to invest more in generation, but also in transmission. So you can evacuate power from the generating point to the consumption point or demand point. These are huge projects,” President Hichilema said.
And African Union Commission Deputy Chairperson Monique Nsanzabaganwa said there was need for a rating framework that considers the true fundamentals of African economies, including the impact of regional integration, the resilience of the informal sectors, and Africa’s growing financial and technological innovations.
Dr Nsanzabaganwa added that it was also important the agency is internationally recognised and accepted instead of it being an isolated entity.
“It should work closely with global financial institutions, multilateral development banks, and investors alike to build credibility and ensure that its ratings are respected in international markets.
Dr Nsanzabanga said the initiative of the credit agency aligns perfectly with the objectives of the African Continental Free Trade Area, the FCFTA, as it will foster a more integrated and financially self-reliant Africa capable of mobilising its own resources for development.
And Ethiopian President, Taye Atske Selassie said it was pleasing that the African Development Bank latest report has disclosed that Africa is the second fastest growing continent with more than a dozen African countries being among the world’s 20 fastest growing countries. – ZANIS.
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