The African Union is making strides towards launching a proposed credit ratings agency by December 31, aiming for an annual operational capital of $873,000, as disclosed by an official during an event held in Lusaka, the capital of Zambia.
This initiative was unveiled by the organization last year, addressing concerns over the fairness of major global credit ratings agencies’ assessments of African countries. Misheck Mutize, the lead expert for country support on rating agencies with the African Union, emphasized the achievability of their timeline, stating that the market is eager to witness the developments surrounding this project.
In his presentation, Mutize outlined the African Union’s strategy to secure funding from shareholders through equity capital. This capital is expected to be sourced from various entities, including African multilateral financial institutions, domestic and regional ratings agencies, and private international investors. The goal is to establish a solid financial foundation to support the agency’s operations.
Crucially, the new agency aims to achieve self-sustainability by generating revenue from the services it offers. To maintain credibility and prevent conflicts of interest, it will refrain from accepting funds from governments. This approach underscores the importance of impartiality and integrity in the agency’s operations, ensuring that its assessments remain unbiased and reliable.
However, before proceeding with the implementation of the proposal, it must receive approval from the African Union executive council. This step emphasizes the organization’s commitment to transparency and governance, ensuring that all decisions align with its overarching objectives and principles.
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