Afreximbank welcomes Africa’s credit rating agency AfCRA

The Africa Credit Rating Agency has been officially launched in Mauritius, with a presidential aide saying President Bola Tinubu played a role in pushing for the continental institution.

The agency, known as AfCRA, was officially launched by the African Union in Port Louis, Mauritius, on Wednesday as an Africa-focused institution designed to provide independent assessments of the creditworthiness of African governments, companies and other institutions.

The African Export-Import Bank (Afreximbank) has welcomed the introduction of the AfCRA, instituted to strengthen continental capital markets.

The Special Assistant to the President on Social Media, Dada Olusegun, said the establishment of the agency followed years of advocacy for an African-owned credit rating institution.

“While the idea of having an African Credit Rating Agency was first proposed in 2017, recent advocacy and push by President Tinubu has now made it a reality,” Olusegun said in a post on X on Thursday.

He added, “Since he emerged as President of Nigeria, Africa has taken front row in shaping its own history with the establishment of various institutions including the African Energy Bank which is set to be headquartered in Abuja.”

He also shared a video of Tinubu advocating for the establishment of an African rating agency at a recent meeting in Kigali.

Tinubu said he made the case in a Financial Times article in February and repeated it at the Africa CEO Forum in Kigali in May.

The African Union said AfCRA was endorsed by its Assembly in 2018, while the African Peer Review Mechanism was later tasked with supporting the process of turning the initiative into an operational institution.

The AU said AfCRA is intended to complement, rather than replace, international credit rating agencies by providing assessments based on African data, expertise and economic realities.

The agency is expected to rate African sovereigns, sub-sovereigns, companies and institutions.

The AU Commission Chairperson, Mahmoud Ali Youssouf, said at the launch that AfCRA would help address gaps in the assessment of African economies and contribute to strengthening the continent’s financial architecture.

He stressed that the agency would not be established to guarantee favourable ratings for African countries but would be expected to provide independent, evidence-based and technically rigorous assessments.

AfCRA is headquartered in Port Louis, Mauritius, which the AU said was selected because of the country’s financial services sector, regulatory framework and connectivity with African and international markets.

Afreximbank said it is an important milestone in expanding the continent’s capacity to generate credible, independent analysis of African credit risk.

In a statement issued by Vincent Musumba, Communications and Events Manager, Afreximbank, on Thursday, the bank said credit ratings played a crucial role in determining access to capital.

The bank added that credit ratings also influence investor perceptions and shape the cost at which governments, institutions, and businesses finance development.

It said that assessments of African credit risk must remain independent, rigorous, and evidence-based, while reflecting a complete understanding of regional economic structures, local institutions, and continental realities.

The bank stated that AfCRA’s value would be measured by the credibility of its analysis, the quality of its data and the transparency of its methodology.

“AfCRA’s value will also be measured by its ability to deepen the understanding of African sovereigns, sub-sovereigns, and corporate credit.”

Highlighting current market gaps, Afreximbank observed that many African issuers remain unrated, while local-currency and sub-sovereign markets continue to suffer from limited rating coverage.

The bank said it has consistently maintained that African Multilateral Financial Institutions should be assessed on the basis of their fundamentals, performance, legal frameworks, mandates, and operating models.

Commenting on the uniqueness of the African market, Mr Denys Denya, Senior Executive Vice- President, Afreximbank, stressed the need for an authentic approach.

“The rating methodology AfCRA develops must recognise the uniqueness of our environment and its institutional structures.

“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,” Denya said.

Highlighting the need for operational autonomy as the agency takes off, Denya emphasised the importance of maintaining continental integrity.

“Most importantly, AfCRA must set a new benchmark for the continent, maintain its independence, and remain wholly owned and controlled by Africans.

“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,” Denya added.

The bank said that AfCRA should complement existing international and regional rating agencies, broadening the range of credible analysis available to investors while strengthening competition, transparency, and analytical capacity within Africa’s credit markets.