1. Konrad Reuss Standard & Poors
Financial Integration and Risk Mitigation in Southern Africa: UNDP/S&P Ratings Initiative OECD policy seminar 25 – 26 March
Konrad Reuss
Standard & Poors

2. Number of Standard & Poor's Sovereign Credit Ratings

3. Distribution of FX Sovereign Ratings 1975-2003

4. ODA vs. FDI vs. MDGs ODA flows have been declining:
Peak in 1990 of US$ 63.5 billion
Down to US$ 34 billion in 2002
Private capital flows to developing countries surpassed ODA going from US$ 60bn to US$ 150bn
Africa received 2.3% of the world FDI, and only 0.7% of world equity investment.
No single African country under the top 20 FDI recipients; flows to 23 of the continent’s 53 countries declined in 2002.
FDI to Africa fell to US$ 11billion in 2002 from US$ 19 billion in 2001
US$ 50 billion investment needed annually between now and 2015 needed to achieve MDGs

5. Strategic Objectives
Enhance resource mobilisation through strengthening domestic financial systems.
Improve developing countries access to foreign direct investment and other private capital flows.

6. Ratings and LDCs
The traditional use of sovereign ratings vs. the needs of LDC
Are sovereign ratings a sufficient or necessary condition for promoting capital flows to LDCs?
Do sovereign ratings provide new information, that is not already available?

7. Africa – Sovereign Ratings History
South Africa: BB (Oct. 94); BB+ (Nov. 95); BBB- (Feb. 2000); BBB (May 2003)
Senegal: B+ (Dec. 2000)
Botswana: A (April 2001)
Ghana: B+ (Sept. 2003)
Cameroon: B (Nov. 2003)
Benin: B+ (Dec. 2003)
Burkina Faso: B (March 2004)

8. Per capita GDP (in USD)

9. Real per capita GDP (% chg.)

10. Government deficit-to-GDP

11. Government Debt-to-GDP

12. Conclusions
Ratings have to be seen as part of the wider range of initiatives in the context of NEPAD, MDGs and AGOA
The combined effect could open the way toward integrating Africa into global capital markets.