Group Chief Economist and Managing Director of Analysis and Commerce Intelligence on the African Export-Import {Bank} (Afreximbank), Dr Yemi Kale, has stated that flawed and externally-biased credit standing fashions are pushing up the price of borrowing for African international locations, regardless of their bettering macroeconomic outlook.
Kale made this identified on Wednesday throughout a Q&A session with journalists on the launch of Afreximbank’s flagship African Commerce Report 2025, themed “African Commerce in a Altering World {Financial} Structure.”
The launch was held on the sidelines of the {bank}’s Annual Conferences (AAM2025) in Abuja.
In line with Kale, worldwide credit standing businesses proceed to evaluate African economies utilizing one-size-fits-all fashions that don’t mirror the construction, dangers, or coverage frameworks throughout the continent. The consequence, he defined, is an artificially excessive notion of threat that raises the price of capital throughout African markets.
“Once you enhance the price of funds for African banks to develop cash, and when these banks need to lend again to African international locations, it turns into a burden. You possibly can’t lend greater than what you borrowed, so the strain builds,” he stated.
Africa wants its personal ranking system
Kale argued that the answer is for the continent to ascertain its personal ranking system that understands its distinctive improvement context.
“We want an African-centred ranking company that develops indicators that make sense for African international locations,” he stated. “Different areas like Asia have already got theirs. We’ve to construct ours to mirror our realities.”
He famous that resistance from international stakeholders is probably going within the early phases, however insisted that credibility will develop with use and transparency.
“Initially, they’ll push again, after all,” Kale stated. “However as extra African international locations undertake and use them, the worldwide group may have no alternative however to simply accept them, identical to the present ranking businesses had been ultimately accepted.”
Kale additionally pointed to different funding channels as a approach to ease reliance on the Eurobond market, the place African international locations typically face punitive charges on account of poor credit score assessments. He talked about that partnerships with international locations like China, in addition to elevated home capital mobilisation, might supply a sustainable path ahead.
He added that African {financial} establishments are already working to lift extra capital to extend lending capability and scale back exterior dependencies. “We’ve a superb combine of other financing choices accessible,” he stated.
Regardless of international pressures, Africa stays resilient
Whereas acknowledging the powerful international {economic} local weather, Kale pressured that Africa has remained comparatively resilient, partially on account of its restricted integration into the worldwide {financial} system—an element he believes is now working within the continent’s favour.
“What was once a weak spot has turn into our power. The worldwide commerce wars and geopolitical tensions are having restricted direct results on us,” he stated.
He additionally highlighted the expansion of intra-African commerce as a optimistic development, noting that it serves as a buffer in opposition to exterior shocks. Kale revealed that, for the primary time in Nigeria’s historical past, the nation traded extra with African nations than with every other area—an indication that commerce throughout the continent is gaining traction.
The African Commerce Report 2025 critiques macroeconomic developments throughout Africa and gives strategic steerage for governments, policymakers, and companies seeking to navigate a turbulent international {financial} panorama.
