South African Reserve Bank Governor Lesetja Kganyago on Thursday called for increased transparency from global credit ratings agencies, saying developing nations should have the ability to challenge their methodologies to ensure fairer assessments.
Speaking at a press conference after the conclusion of the Group of 20 (G20) finance chiefs’ meetings in Washington, Kganyago said that openness in the ratings process could lead to better outcomes for developing countries.
“If we are able to take their methodology and take the data they are using and see whether we are able to replicate it… we can actually engage them and challenge them based on their methodology and say that your rating is wrong,” he said.
South Africa, which currently holds the G20 presidency, has pledged to address the high cost of capital faced by developing economies, including the role credit rating agencies play in that challenge. However, a proposed commission to examine these issues has yet to be established, according to Reuters.
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The initiative, outlined in a policy priorities document at the start of South Africa’s presidency, aims to explore barriers to affordable and predictable capital flows for development, including those linked to rating agencies’ methodologies.
During the fourth meeting held under South Africa’s G20 presidency, finance ministers and central bank governors issued a Chair Summary instead of a formal communiqué, a recurring outcome in multilateral discussions where consensus is not achieved.
The summary highlighted global economic resilience but noted persistent risks such as geopolitical tensions, supply chain disruptions, high debt levels, and severe weather events. It also underscored the need to address excessive imbalances, particularly affecting developing economies.
“Given the challenges of high public debt and fiscal pressures, members acknowledged the importance of pursuing growth-oriented macroeconomic policies to enhance long-term growth potential,” the Chair Summary stated.
The group further discussed the uneven development of artificial intelligence across developing nations, emphasizing innovation’s potential to drive transformation.
It also reaffirmed the importance of reforming multilateral development banks to expand lending capacity and strengthen the voice of developing countries in global decision-making.
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Image Credit: Reuters
