Fact-Check: Dr. Bawumia's Claim That Ghana Will Be the Second African Country to Implement a Credit Scoring System is False
The Flagbearer of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia, recently made a bold claim during a visit to Yeji in the Bono Region, stating that Ghana would be the second African country to implement a credit scoring system, after South Africa. This, he noted, would be launched in November as part of his vision for transformative policies aimed at improving the lives of Ghanaians.
Dr. Bawumia asserted, “Either this October or next November, Ghana will launch its credit scoring system. In all of Sub-Saharan Africa, only one country, South Africa, has a credit scoring system. Ghana will be the second African country to have one.”
While the claim sounds significant in terms of Ghana’s financial infrastructure development, a closer examination reveals that this assertion is not accurate.
Understanding Credit Scoring and Credit Rating Systems
Before delving into the claim, it is essential to differentiate between two commonly confused terms: credit scoring and credit rating systems.
Credit Scoring System: A credit scoring system focuses on individuals, assigning a numerical score based on personal financial data such as payment history, amounts owed, and credit history length. This score is used by lenders to assess the risk of providing loans to individuals, often influencing decisions on mortgages, credit cards, and personal loans.
Credit Rating System: Unlike credit scoring, credit rating systems evaluate the creditworthiness of institutions, companies, or governments, usually expressed through letter grades (like those assigned by S&P, Moody’s, and Fitch). It is primarily used by investors and stakeholders to assess risk in financial dealings such as bonds and loans.
In Dr. Bawumia’s claim, he refers to the credit scoring system, specifically designed for individuals.
Verification of the Claim
Dr. Bawumia's statement that Ghana will be the second African country to implement a credit scoring system after South Africa is incorrect. Research shows that multiple African countries already have functioning credit scoring systems. These systems have been in place for several years, aiding financial decision-making for individuals and businesses.
Here are a few examples:
Kenya: Since 2017, Kenya has had a robust credit scoring system, primarily managed by credit reference bureaus (CRBs) such as Metropol and Creditinfo, which are licensed by the Central Bank of Kenya (CBK). These bureaus use data to assess creditworthiness and improve access to credit for both individuals and businesses.
Nigeria: Nigeria also boasts a nationally regulated credit scoring system under the oversight of the Central Bank of Nigeria (CBN). Credit reporting agencies such as CRC Credit Bureau and First Central Credit Bureau provide individuals the ability to request their credit scores.
Rwanda: Rwanda has implemented a credit scoring system to enhance its financial inclusion, helping lenders assess the risk of extending credit.
Uganda and Morocco: Both of these countries have credit scoring mechanisms in place, functioning similarly to those in Kenya and Nigeria.
Conclusion
Dr. Mahamudu Bawumia’s claim that Ghana will be the second African country to implement a credit scoring system is false. In reality, several African countries, including Kenya, Nigeria, Rwanda, and Uganda, have had functioning credit scoring systems for years. Therefore, Ghana’s upcoming system would not be the second on the continent.
This misstatement underscores the importance of verifying such claims, especially when they involve significant developments in financial infrastructure.
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