Sovereign creditworthiness is interpreted and reassessed through several overlapping evaluations.
Articles on Moody's
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There have been notable examples of rating agencies differing significantly in their decisions on African institutions and countries.
Rating agencies shape the policy space for pursuing development goals. Yet they remain private firms, operating under commercial incentives.
The problem with rating models applied to African countries is that they use a narrow definition of risk and don’t take into account qualitative factors.
African countries are being driven into a debt dependency cycle. Three major factors are at play.
Moody’s acquisitions are a setback for the development of alternative rating agencies to compete against the monopoly of the ‘big three’.
Low-income countries that sought to spend more on health care during the pandemic have been hit with ratings downgrades, while others avoided borrowing entirely.
The first trading day after Moody’s cut the UK to three notches below Aaa, the markets shrugged.
A toxic mix of ugly politics and structural economic problems is threatening to tip debt over the edge.
Top contributors
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Post Doctoral Researcher, Graduate School of Business (GSB), University of Cape Town
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Senior Fellow, Centre for Policy Research (UNU-CPR), United Nations University; Aston University
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Professor of Economics, Stockton University
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Professor of Finance, Keele University
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Professor of Banking and Finance Law, Queen Mary University of London
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Professor at the Nelson Mandela School of Public Governance, University of Cape Town