Credit Rating Agencies Told to Freeze Action During Pandemic
- Downgrades during virus are ‘like kicking us when we’re down’
- Major African economies’ debt has been downgraded since April
Commuters wear protective face masks as they wait at a taxi rank in Rustenburg, South Africa.
Photographer: Waldo Swiegers/BloombergCredit-rating companies should suspend their assessments for the foreseeable future because downgrades can force asset managers to sell sovereign debt and unnecessarily increase the cost of capital when economies are already facing headwinds due to the coronavirus pandemic, according to the head of South Africa’s tax agency.
Some of Africa’s biggest economies, from Ghana through Angola, Nigeria and South Africa, have had their debt assessments downgraded or the outlook on their ratings changed to negative by more than one credit-rating company since March. That’s due to rising risks emanating from the coronavirus outbreak, and their effects these governments’ ability to find funding and service debt.