Reliable Data: A Rare Mining Resource in Africa
Calls for an African rating agency are growing louder again. However, this overlooks one thorny issue: the lack of data on which a rating agency must rely.
By Jeremy Gaines and Christian Hiller von Gaertringen
Last week, Nigerian President Bola Tinubu published in an op ed London’s Financial Times championing the creation of an African rating agency. The headline alone surprised us: “Africa needs its own rating agency.” Why? Because according to the current resolutions of the African Union, that is happening anyway.
The AU has firmly decided to launch the Africa Credit Rating Agency this year. The first step towards establishing such an institution was the creation of a new acronym: AfCRA. Indeed, the United Nations Economic Commission on Africa drew attention to it in a statement one year ago:
“This initiative is in line with Decision Assembly/AU/Dec.631 (XXVIII) adopted by the Assembly of Heads of State and Government of the African Union at its 28th Ordinary Session in Addis Ababa, Ethiopia.”
In this blog, we will less consider the pros and cons, but focus on one major obstacle such a credit rating agency will have to overcome. In fact, we will highlight an aspect that has so far been largely ignored and which President Tinubu glosses over: How will such a rating agency obtain reliable data? In our view, this is the by far the biggest obstacle to a fair assessment of the African economy and its creditworthiness in the world.
What awaits you behind the paywall:
Why it is so difficult to get reliable data on Africa?
Examples of statistical absurdities.
What this means for planning businesses, ODA, and economies
