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The United Nations Development Programme (UNDP) has expressed interest that astir African countries lacked a due knowing of the recognition standing process and the benignant of information required to amended their ratings.
UNDP Chief Economist and Head of Strategy, Analysis and Research for Africa, Dr. Raymond Gilpin, made this known connected Tuesday successful Abuja during a dialog with cardinal institutions themed ‘Navigating Credit Ratings and the Price of Risk: Unlocking Affordable Capital for Nigeria’.
Gilpin said that portion galore African nations are acquainted with moving with the International Monetary Fund (IMF) and the World Bank, they often conflict to grasp the chiseled requirements of recognition standing missions.
“Many African countries don’t afloat recognize the process. They are much accustomed to dealing with the IMF and the World Bank. They cognize however to hole for those missions.
“Credit ratings missions are antithetic and much specific, and truthful knowing the process and what benignant of information is indispensable for the recognition ratings is precise important,” helium said.
He identified 3 large challenges facing African countries successful improving their ratings — deficiency of knowing of the process, insufficient and inconsistent data, and mediocre interagency coordination.
“It’s not conscionable fiscal and economical data, it’s besides institutional, regulatory and governance data. Many governments don’t cod each of that data. Even erstwhile they person it, they don’t ever stock it,” Gilpin noted.
“That leaves a spread successful the analysis. Getting governments acceptable and capable to hole the information and past marque it disposable successful a timely and reliable mode is simply a cardinal challenge.”
He further emphasised that a coordinated attack among ministries, departments, and agencies (MDAs) was indispensable to guarantee data, policies, and narratives stay consistent.
“Preparing for recognition ratings requires galore authorities agencies to travel unneurotic to guarantee that the data, the argumentation frameworks, and the communicative are each consistent.
“Many countries bash not person an interagency committee to bash that, and due to the fact that of that, it leaves the recognition ratings agencies with immoderate uncertainty astir however credible a country’s communicative is,” helium said.
Explaining the process of standing a country, the UNDP economist said it involves 3 main phases. These are information assessment, committee deliberation, and authorities review.
“First, they look astatine the information that says however the system is being managed, however it’s performing, what benignant of institutions and laws alteration the backstage sector, and what governance looks like. Those indicators are calculated to springiness the archetypal rating,” helium said.
“After that, they sermon the results successful a committee to measure credibility, reforms, and aboriginal prospects. If the treatment is positive, the archetypal standing could beryllium improved; if negative, it could beryllium reduced.
“Once that is done, the standing goes to the authorities for reappraisal earlier being published arsenic the last standing to the world.”
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