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AU Panel Criticises Ratings Agencies for Cutting Poor Nations’ Debt Ratings During Pandemic

An African Union review panel criticized credit ratings companies for aggressive downgrades of countries on the continent during the coronavirus pandemic.The African Peer Review Mechanism — an entity of the AU — in collaboration with the African Development Bank and the United Nations Economic Commission for Africa, launched its first Sovereign Credit Rating Review Report on Thursday. It showed 11 countries were downgraded in the first half of 2020 and 12 had their outlooks changed to negative, meaning their assessments were at risk of being cut.  The worst-affected country was Zambia, the report shows. The copper producer is trying to convince bondholders to accept a debt-service holiday and skipped a coupon payment this month, moving closer to becoming the first African nation to default on dollar bonds since the onset of the pandemic. That resulted in S&P Global Ratings cutting its assessment of the country’s debt for this third time this year, to selective default. African leaders including Senegalese President Macky Sall has complained in the past that Western prejudice keeps borrowing costs unfairly high on the continent.