by Sascha Polkey
BASA Insights and Advocacy
As Akinwumi Adesina closed his tenure as President of the African Development Bank in 2025, he stated: “The cost of raising capital in Africa is three or four times what it is in other regions. Why? Because of the so-called Africa premium… The issue is perception, the perception is not reality.”
The term ‘Africa Premium’, was coined to highlight the higher cost of borrowing paid by African countries, driven by a negative view of Africa’s sovereign risk by global rating agencies. A view shaped by lack of knowledge, access barriers and media stereotypes that position Africa as a poor beneficiary rather than an economic engine.
The numbers are staggering. According to UNDP’s 2023 report, Lowering the Costs of Borrowing in Africa – The Role of Sovereign Credit Ratings, African countries lose approximately US$74.5 billion annually through excess interest payments and foregone financing opportunities – not because data is unavailable, but because credit rating agencies apply subjective criteria that misrepresent actual African risk.
But here’s the contradiction, Moody’s Analytics data shows Africa’s risk for investments and infrastructure is “almost ten times lower” than Latin America and Eastern Europe. Sub-Saharan Africa’s perception risk vanishes when you factor in actual financial sector development, transparency, institutional quality and informal sector size.
The Cost of Narrative
Media stereotypes carry a measurable economic cost. An Africa No Filter report, The Cost of Media Stereotypes to Africa, shows that negative media stereotypes are inflating the cost of borrowing for African countries by up to $4.2 billion each year – an annual loss that could fund education for over 12 million children, immunisations for over 73 million children, or clean drinking water for two-thirds of Nigeria’s population.
Analysis reveals that over 80% of the stories Africans read about other African countries are hard news – mostly negative, event-driven reports on elections, crises and conflicts. International outlets continue to rely on familiar tropes while largely ignoring the stories that humanise Africa.
Data Sovereignty and Perception
The African Credit Rating Agency (AfCRA) opens its headquarters in Mauritius in 2026. It will provide independent, locally informed credit assessments that complement global agencies.
Even a one-level improvement in Africa’s average credit rating could unlock an additional $15.5 billion in funding – surpassing Official Development Assistance by 12% and meeting 80% of Africa’s infrastructure financing needs. But institutional correction alone is insufficient. The perception gap persists and requires strategic narrative change through culture.
The creative economy has the same problem – but is also part of the solution
Culture is key to perception because it works outside traditional channels. African fashion, music and film resonate globally – instantly and effortlessly, driving empathy and emulation. Culture is a signal about who we are as people, it tells our stories, gives imagination and colour to the notion of place.
Yet African creatives face a perception problem, their extraordinary potential is constrained by systems designed before creativity became recognised as economic infrastructure. Investors see the creative sector as experimental or charitable, not as a reservoir of wealth-generating assets and societal solutions. Distribution channels remain externally controlled. Value is extracted rather than being captured locally.
Closing the Gap
Perception precedes action. When policymakers see the creative sector as economic infrastructure, corporates see it as investable and global investors understand African creative assets as wealth-generating – the conditions for growth unlock.
This shift requires three things:
Better data: Systems like AfCRA demonstrate the power of locally informed intelligence. Research agencies, institutions and intermediaries work to collate the data that matters.
Better storytelling: Understanding what the data means and who tells that story. Training and awareness for media, content creators and storytellers, reframing the opportunity through evidence, success stories, great ideas and initiatives.
Strategic advocates: Those who understand both creative practice and economic policy play a role in championing the value of creativity and culture. Cross sector collaboration demonstrates value in action.
BASA’s work in the creative sector zeros in on these shifts and is core to its strategy. Working with its members and partners, BASA’s mission in Africa’s creative sector is to reclaim not only data, but economic sovereignty and identity too.
