The agency, which would craft its own assessment of the risks in lending to African countries, would be based on the continent, Misheck Mutize, lead expert for country support on rating agencies with the African Union, said.

It will also add context to the information investors consider when deciding whether to buy African bonds or lend privately to countries.

“We already have quite a huge interest in the private sector to support the implementation of this,” Mutize said, adding they are targeting a launch in 2024.

The AU and leaders of member nations from Ghana to Senegal to Zamia alleged that the “big three” ratings agencies – Moody’s, Fitch and S&P Global Ratings – do not fairly assess the risk of lending to African countries, and say they are quicker to downgrade them during crises such as the COVID-19 pandemic.

All three rating agencies have denied bias and say their ratings follow the same formula across continents.

Moody’s and S&P Global Ratings did not immediately respond to a request for comment. Ravi Bhatia, S&P’s lead analyst for sovereign ratings, told Reuters recently that the agency applies the same criteria consistently to all regions.

A Fitch Ratings spokesperson said all sovereign rating decisions use “globally consistent and publicly available criteria” and that all rating drivers were clearly identified.

Broadly speaking, credit ratings are designed to gauge a borrower’s risk of default, and factor in the terms on which banks and others will lend to them. More than a dozen African countries have outstanding international bonds.

A United Nations Development Programme study in April showed that African countries could save up to $74.5 billion if credit ratings are based on less subjective assessments, citing “idiosyncrasies” in the frequency of rating actions for African countries as an example.

Mutize said the new agency was a push to change the narrative.

“Our goal has not been to replace the big three…we need them to support access to international capital. Our view has been to widen diversity of opinions,” he said.

“We know the big three follow the opinion of other smaller ratings agencies. They’ve acknowledged that other smaller ratings agencies have got an edge in understanding domestic dynamics.”

AU finance ministers passed a resolution over the summer to endorse the plan for the new agency, an effort spearheaded by the African Peer Review Mechanism (APRM), a branch of the AU formed last year to improve governance across the continent. The full AU executive council is expected to adopt the same resolution in February.

The agency would be self-funded and private-sector driven with AU oversight, Mutize said.

“Investors have been quite positive. They want to see what will be the output of this,” he added. “Any investor will pay attention to anything that brings them information.”