B20 Chair Sim Tshabalala Hits Out At Global Credit Ratings Agencies Over African Debt Bias

B20 Finance and Infrastructure task force chair Sim Tshabalala has renewed his criticism of international credit ratings agencies, warning that their treatment of African economies reflects a persistent and damaging bias.

Tshabalala, who also leads the continent’s biggest bank, is one of several high-profile figures challenging what they say is the consistent mispricing of African debt.

His concerns have been echoed by industry leaders and senior South African officials at the B20 summit held at the Sandton Convention Centre. The gathering forms the business arm of the G20 under South Africa’s presidency, which concludes this week.

African Debt Mispricing Under Fresh Scrutiny at B20

Tshabalala said the lack of clarity around how African states are assessed by ratings agencies can no longer go unchallenged.

“The mispricing of African debt costs two percentage points of GDP. So, if the continent is going to grow at 4.5% this year, it should be growing at 6.5%. I mean, that is why it’s characterised by me and by many others as scandalous,” said Tshabalala.

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Although South Africa recently secured its first S&P rating upgrade in almost twenty years, Tshabalala argued the country deserves a stronger assessment.

“It should actually be rated BBB, which is investment grade, that would save South Africa R50 billion in the medium term. Think of how many schools, how many bridges, how many roads could be built by doing that.”

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