By Lucy Ogalue
Some stakeholders have urged African countries to mobilise more domestic capital to finance development and reduce reliance on external financing.
The Economic Commission for Africa (ECA) said this in a statement on Thursday.
The ECA said the stakeholders made the call at the just concluded 2nd Annual Conference on Credit Ratings in Mauritius.
The conference brought together policymakers, investors, regulators, credit rating experts and development partners to discuss Africa’s financing challenges.
The commission said participants explored ways to strengthen credit rating systems, deepen domestic capital markets and mobilise resources for long-term development.
UN Resident Coordinator for Mauritius and Seychelles, Lisa Singh, said Africa’s cost of capital remained among the highest globally.
Singh called for accurate, transparent and comprehensive assessments of African economies to guide investment decisions and improve financing conditions.
She said the issues discussed directly affected governments’ ability to finance infrastructure, support businesses, create jobs and improve livelihoods.
The Chief Executive Officer of African Peer Review Mechanism, Marie-Antoinette Rose-Quatre, urged African countries to create conditions capable of unlocking more domestic capital for development.
Rose-Quatre said stronger governance, effective risk management and productive investment were necessary conditions for mobilising Africa’s resources.
She also highlighted the planned launch of the Africa Credit Rating Agency as part of efforts to strengthen the continent’s financial architecture.
Mauritius Minister of Financial Services and Economic Planning, Jyoti Jeetun, said deeper and more liquid capital markets were needed to diversify financing sources.
She said stronger capital markets would support infrastructure development, business expansion and innovation across Africa.
“The development of capital markets should, therefore, be viewed not simply as a financial sector objective, but as an integral component of economic transformation and sustainable development,” Jeetun said.
Sonia Essobmadje, ECA Head of Innovative Finance and Domestic Resource Mobilisation Section, said developing Africa’s capital markets must be a priority.
“Deeper and more efficient domestic markets can help mobilise Africa’s own resources, channel savings into productive investment and reduce reliance on external financing,” Essobmadje said.
She also stressed the need to strengthen macroeconomic fundamentals so risk assessments could better reflect the realities of African economies.
Participants identified pension funds, sovereign wealth funds, insurance assets and reserves as potential sources of increased domestic development financing.
They also discussed local-currency bond markets, stronger market infrastructure, financial literacy and greater liquidity as measures to deepen African capital markets.
The conference further examined the potential of artificial intelligence, fintech and blockchain to improve access to finance and strengthen credit assessment.
Discussions also focused on improving knowledge of sovereign and corporate credit ratings among governments, investors, regulators and state-owned enterprises.
The conference was organised by the African Peer Review Mechanism in collaboration with ECA, the African Union, Mauritius and other partners.(NAN)