A sovereign credit rating assesses a government\u2019s ability to repay its debt and plays a crucial role in determining borrowing costs on international markets. Lower ratings typically translate into higher interest rates, increasing debt burdens for already constrained economies.<\/p>\n
<\/p>\n
Speaking at the opening of the UN Economic and Social Council\u2019s Special Meeting on Credit Ratings, Deputy Secretary\u2011General Amina Mohammed said the current system relies too heavily on outdated and incomplete data. Delivering remarks on behalf of Secretary\u2011General Ant\u00f3nio Guterres, she warned that this approach is penalising developing countries and locking them out of critical capital.<\/p>\n
<\/p>\n
\u201cAdequate and timely finance is the fuel that drives sustainable development,\u201d Mohammed said. \u201cToday, that fuel is running perilously low, and it is getting more costly.\u201d<\/p>\n
<\/p>\n
She highlighted that developing countries now face nearly $1.4 trillion in annual debt\u2011servicing costs, while more than 3.4 billion people live in nations that spend more on interest payments than on health or education.<\/p>\n
<\/p>\n
Mohammed said rising global instability has compounded the problem. Higher fuel and raw material prices linked to conflict, along with economic volatility and climate shocks, are intensifying fiscal pressure and slowing growth, particularly in climate\u2011vulnerable countries that lack access to affordable recovery finance.<\/p>\n
<\/p>\n
\u201cThis is a matter of profound importance,\u201d she said.<\/p>\n
<\/p>\n
Mohammed linked the debate on credit ratings to broader efforts to reform the global debt system. She pointed to initiatives such as a borrowers\u2019 platform, new principles for responsible sovereign lending and borrowing, and a UN\u2011led process bringing together debtor nations, creditors, financial institutions, researchers and civil society.<\/p>\n
<\/p>\n
She also cited the planned African Credit Rating Agency as a step toward improving data quality, transparency and risk assessment from a developing country perspective.<\/p>\n
<\/p>\n
Mohammed called for a fundamental shift in the design of credit ratings, urging agencies to assess not only vulnerability but also future opportunity.<\/p>\n
<\/p>\n
\u201cWe must transform mindsets from short\u2011term speculation to long\u2011term investment,\u201d she said.<\/p>\n
<\/p>\n
She stressed that borrowing to invest in health, education, infrastructure and climate resilience can strengthen long\u2011term solvency. Narrow economic indicators, she argued, fail to capture real development potential. \u201cGross domestic product tells us the cost of everything and the value of very little,\u201d she said.<\/p>\n
<\/p>\n
Mohammed urged governments, investors and ratings agencies to work together to ensure credit ratings support sustainable development rather than act as barriers to growth.<\/p>\n
<\/p>\n
–UN\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":30381,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-30380","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Developing countries are being unfairly priced out of the affordable finance they need for sustainable development, as sovereign credit ratings often exaggerate risk and fail to reflect long\u2011term economic potential, the United Nations (UN) warned on Monday.","published_date":"","news_description":"Developing countries are being unfairly priced out of the affordable finance they need for sustainable development, as sovereign credit ratings often exaggerate risk and fail to reflect long\u2011term economic potential, the United Nations (UN) warned on Monday.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30380\/revisions"}],"predecessor-version":[{"id":30382,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30380\/revisions\/30382"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/30381"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=30380"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=30380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}