Africa’s new credit rating agency aims to expand coverage of African borrowers, improve risk assessments, and deepen investor confidence in the continent’s capital markets.
The African Export-Import Bank (Afreximbank) has welcomed the launch of the Africa Credit Rating Agency (AfCRA), describing it as a significant step towards strengthening the continent’s financial architecture and improving how African economies are assessed by investors.
The agency is expected to provide an additional African-led source of credit analysis, with a focus on sovereign governments, sub-sovereign entities and businesses. Its establishment comes amid longstanding concerns about limited credit rating coverage across African markets and the cost of accessing financing for development.
Credit ratings influence how investors assess the risks associated with lending to governments and businesses, affecting borrowing costs and access to international capital markets. Afreximbank said the new agency could help address information gaps by producing independent, evidence-based assessments that account for Africa’s economic conditions and institutional structures.
However, the bank stressed that AfCRA’s credibility would depend on the quality of its analysis, transparency of its methodologies and independence, rather than its ability to issue more favourable ratings for African borrowers.
“The rating methodology AfCRA develops must recognise the uniqueness of our environment and its institutional structures,” said Denys Denya, Afreximbank’s Senior Executive Vice President.
“The Agency must set its own standards and not follow those set elsewhere — it must build a unique identity that conforms to an ‘African best practice’,” he added.
Denya said the agency should establish its own identity while maintaining its independence and African ownership, arguing that its assessments should capture both the strengths of African economies that may be overlooked and the weaknesses requiring reform.
“Most importantly, AfCRA must set a new benchmark for the continent, maintain its independence, and remain wholly owned and controlled by Africans,” he said.
“We must all use it, and in return expect a complete assessment of where we (Africa) stand: the strengths the market has ignored, and the weaknesses we still need to fix.”
Expanding access to credit assessments
Afreximbank said the agency could help address gaps in rating coverage, particularly among African borrowers that have limited access to credit assessments. Local-currency debt markets and sub-sovereign entities also remain areas where expanded coverage could improve the information available to investors.
More comprehensive credit assessments could support the development of domestic and regional capital markets by enabling investors to evaluate a wider range of financing opportunities.
The bank also highlighted the importance of ensuring that African multilateral financial institutions are assessed according to their financial fundamentals, performance, legal frameworks, mandates and operating models.
Working alongside other members of the Alliance of African Multilateral Financial Institutions (AAMFI), Afreximbank has argued that a proper understanding of these institutional characteristics is necessary for balanced and credible assessments of African financial institutions.
The emergence of AfCRA is expected to broaden the range of credit opinions available to governments, companies and investors. Afreximbank said the agency should complement existing international and regional rating institutions while contributing to greater competition, transparency and analytical capacity.
Implications for Africa’s financing needs
The launch comes as African countries seek to mobilise substantial financing for infrastructure, industrialisation, regional trade and broader economic transformation.
Access to reliable credit information is an important component of this process, particularly as governments and businesses seek to attract domestic and international investment while managing borrowing costs.
An African-based rating agency could contribute to this effort by developing assessments informed by the continent’s economic structures and institutional realities. Its long-term impact, however, will depend on whether investors trust its ratings and whether its analysis is consistently rigorous and transparent.
Afreximbank congratulated the African Union, the African Peer Review Mechanism (APRM) and other stakeholders involved in establishing the agency.
The bank said it looked forward to AfCRA contributing to deeper, more transparent and more efficient African capital markets.
The agency’s launch marks a new development in Africa’s financial landscape, with its credibility and independence likely to be central to its ability to influence investment decisions and strengthen confidence in the continent’s borrowers.
