The Minister of Finance and Coordinating Minister of the Economy Mr Taiwo Oyedele has challenged international investors lenders rating agencies and financial institutions to stop treating Africa as a single economic entity and instead assess its 54 countries individually using reliable economic data rather than prejudices and negative perceptions.
Taiwo Oyedele spoke in a short video clip posted on X by the Ministry of Finance on Monday. He said the tendency to judge the continent through generalisations without taking account of the different economic conditions strengths and investment opportunities of individual countries was contributing to unfair assessments and making access to international capital more expensive for African economies.
Oyedele argued that a change in the way African countries are assessed alongside improvements in their domestic economic environments could reduce borrowing costs attract greater investment and unlock the continent’s enormous economic potential.
The minister made the call while discussing Africa’s position in the global financial system urging international stakeholders to base their investment and lending decisions on facts verifiable information and the actual economic performance of individual countries.
‘Ask everybody to kindly look at data in making judgment and assessments not pass prejudices. Don’t paint the whole of Africa with one brush. We are 54 countries’ he said.
He argued that Africa’s 54 countries have different economic structures levels of development resources and investment opportunities and should therefore not be subjected to the same assessments simply because they belong to the same geographical region.
According to him broad negative perceptions about the continent can influence how international investors and lenders assess risks even when individual countries have different economic fundamentals and prospects.
The minister maintained that a more objective assessment of African economies would help investors identify opportunities that could otherwise be overlooked because of sweeping assumptions about the continent.
He also called on African governments to accept responsibility for addressing weaknesses within their respective economies and institutions stressing that the demand for fair treatment must be accompanied by efforts to improve domestic economic management.
‘We are not pointing fingers that’s why I started by saying we’ll clean our own house’ he said.
He explained that African countries must create the right conditions for investment while encouraging international stakeholders to make decisions based on reliable economic indicators rather than inherited perceptions and stereotypes.
The minister said removing the additional financial burden associated with negative perceptions would make borrowing more affordable and improve the ability of African countries to mobilise capital for infrastructure businesses and other development priorities.
He expressed optimism that the continent could achieve significantly stronger economic growth if its countries received fairer assessments and created more attractive environments for investment.
‘So if you can take out those extra costs and then you make it more affordable you create the right environment like I like to say Africa will be unstoppable’ he said.
Explaining the financial implications of the problem Oyedele said Africa continued to face an unfavourable position in international credit and investment classifications with only a small number of countries enjoying the strongest credit ratings.
He said available indicators showed that only one African country was regarded as an emerging market while about three countries on the continent had investment-grade credit ratings.
He questioned why almost the entire continent was either unclassified or categorised as frontier markets arguing that such classifications raised concerns about how African economies were assessed in the international financial system.
The minister said the consequences extended beyond the ratings themselves as the perception of higher risks could affect the terms on which African countries obtain loans and attract international investments.
He cited figures attributed to the United Nations Conference on Trade and Development (UNCTAD) which put the additional borrowing costs paid by developing countries compared with developed economies at about $500 billion.
Oyedele referred to the estimate while discussing issues raised at the G24 meeting during the recent World Bank and International Monetary Fund (IMF) Annual Meetings.
He argued that developing countries were already paying significantly more to access international financing and that negative perceptions created another layer of costs for African economies.
Describing this additional burden he said: ‘If you add on top of that you then conclude that we have what I call the narrative costs the prejudice premium or the stereotype tax and it adds up.’
The minister argues that the continent’s financing challenges cannot be addressed by domestic reforms alone if international investors and financial institutions continue to rely on generalised perceptions when assessing individual countries.
He therefore called for a combination of stronger economic management within African countries and more evidence-based assessments by international financial institutions lenders and investors.