Bush administration proposes credit rating plan for Africa

By MARTIN CRUTSINGER
The Associated Press
4/23/02 5:55 PM

WASHINGTON (AP) -- The Bush administration urged African countries Tuesday to work toward establishing solid credit ratings, which he said would represent a major accomplishment on their road to greater prosperity.

"It's simple. It's straightforward. It is not rocket science. By attaining a sovereign credit rating, your country will help reduce risk and encourage investment," Secretary of State Colin Powell said.

Both Powell and Treasury Secretary Paul O'Neill spoke to finance ministers and central bank governors from several African countries at a State Department conference aimed at supplying them with information on what is needed to establish international credit ratings.

Currently just four of 48 nations in sub-Saharan Africa have sovereign debt credit ratings: South Africa, Botswana, Senegal and Mauritius.

The administration believes that a dozen more African countries with balanced budgets and established protections for individual property rights may soon be able to borrow money in private capital markets.

African countries considered close to this stage by administration officials are Ghana, Kenya, Uganda, Mozambique and Mali.

"A sovereign credit rating can be your country's ticket to the benefits of the global economy and to the capital flows that exist in the global economy," Powell told the conferees.

O'Neill used the weekend meetings of the International Monetary Fund and the World Bank to push the administration's credit rating initiative. He contends policy-makers should work toward a world in which all nations have investment-grade debt.

The Treasury Department announced Tuesday that O'Neill will conduct a fact-finding visit to four African nations in May to learn firsthand what development programs have been able to accomplish and what more must be done to attract private capital.

He will be accompanied on part of the trip by U2 rock star Bono, who has campaigned for a number of years to get wealthy countries and the international lending agencies to forgive bigger portions of loans they have made to the poorest nations.

O'Neill's trip, which will begin on May 20, will include stops in Ghana, South Africa, Uganda and Ethiopia.


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Associated Press writer George Gedda contributed to this report.

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