Credit rating agencies (CRAs) play a central role in shaping access to finance for countries in the Global South by influencing borrowing costs, investor perceptions and market access. Although presented as neutral and technical, their assessments directly affect the cost and availability of external financing, often constraining fiscal space and limiting development spending.
The briefing shows that the current rating system is structurally biased and procyclical, disproportionately penalising developing countries. Downgrades during crises—such as pandemics, climate shocks or political instability—raise borrowing costs precisely when financing is most needed, reinforcing global financial hierarchies. It also highlights the concentration of the industry, methodological opacity and conflicts of interest as key concerns.
Drawing on country case studies across Africa, Asia and Latin America, the analysis illustrates how rating actions amplify shocks and tighten financing conditions in practice. The briefing calls for reform through more transparent, development-oriented approaches, including proposals for an African Credit Rating Agency and a UN-based multilateral alternative, to improve financing conditions and support sustainable development.
