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Low credit ratings cause high borrowing costs, liquidity challenges in Africa

The article from BusinessDay discusses how low credit ratings are significantly impacting African countries by increasing borrowing costs and creating liquidity challenges. It highlights that many African nations face high interest rates on international loans due to their perceived risk, which is reflected in their low credit ratings. This situation is exacerbated by global economic conditions, including rising interest rates in developed economies, which make borrowing more expensive for countries with lower credit ratings. The article points out that this not only limits these countries' access to international capital markets but also affects their ability to fund development projects and manage debt. Furthermore, it notes that credit rating agencies often do not fully account for the unique economic contexts of African countries, leading to ratings that might not accurately reflect their economic stability or potential. The piece calls for a reevaluation of how credit ratings are assigned to African nations to better reflect their economic realities and potential for growth.

Read the Full businessday Article at [ https://businessday.ng/news/article/low-credit-ratings-cause-high-borrowing-costs-liquidity-challenges-in-africa/ ]