The African Union (AU) has exposed mistakes in Kenya’s credit rating while raising concerns over Moody’s decision to change the rating from negative to positive. According to the AU’s African Peer Review Mechanism (APRM), Moody’s made an error by skipping the “stable” rating and moving directly from negative to positive. The AU believes this decision was rushed and could lead to problems in the future.
This criticism came shortly after President William Ruto spoke about Kenya’s economy on January 26, 2025. In his speech, Ruto praised the country’s progress, mentioning the recent upgrade in the country’s credit rating. He credited his government’s policies for helping reduce inflation, interest rates, and exchange rates. Ruto expressed confidence in the country’s economic recovery.
However, APRM disagreed with the timing of Moody’s rating change. They pointed out that Moody’s had made a similar mistake last year when it downgraded Kenya’s rating. At that time, the rating was based on incomplete information, as key financial bills had not been fully discussed. The AU also reminded Moody’s of its similar mistake with Nigeria, where a downgrade was later reversed due to a misunderstanding of the country’s situation.
The AU believes that making such hasty decisions can be harmful. Improper ratings can cause financial instability and losses, especially for countries like Kenya that rely on international credit markets. The AU has called on Moody’s to be more careful and to wait for all necessary information before making any rating changes in the future.
This disagreement has raised questions about the accuracy of Moody’s ratings and whether President Ruto’s optimism about Kenya’s economic future is based on reliable data. The AU’s concerns suggest that the credit rating agencies may need to reconsider their methods when assessing African economies.
By Newshub