African Credit Rating Agency to Begin Operations September 2025

By Adedapo Adesanya

The African Credit Rating Agency (AfCRA), which was formed to provide accurate ratings for countries on the continent, will officially be launched in the third quarter of the year.

The continental initiative will provide alternative assessments of repayment risks, after several African leaders and lenders, lamented the unfair ratings by other established ratings firms like Fitch, Moody’s and S&P Ratings.

According to African Peer Review Mechanism (APRM), a body established by the African Union (AU) to do the groundwork for the launch of the agency, AfCRA plans to start operations by the end of September 2025.

The agency will publish its first sovereign rating report by the end of the year or early 2026, said Mr Misheck Mutize, lead expert on credit-rating companies at APRM.

It will appoint a chief executive next quarter, and candidates have already been shortlisted.

The new company will focus on local-currency debt ratings to help support the development of domestic capital markets and reduce foreign currency risk on the continent.

African leaders, including President Ruto of Kenya and former Senegalese President, Mr Macku Sall have accused the foreign ratings companies of bias and a lack of transparency.

Recently, Ghana and Zambia, have also lambasted these agencies for their ratings.

The AfCRA will seek to address that issue by having a presence on the continent, although it has raised worries about how objective and accurate the ratings will be.

“This was designed to maintain independence and avoid conflict of interest,” Mr Mutize clarified, as per Bloomberg, adding that “Shareholding will mainly be African private-sector driven entities.”

The call for AfCRA was heightened after Fitch downgraded the Cairo-based Africa Export-Import Bank (Afreximbank) credit rating to BBB-, one notch above junk ratings, from BBB, citing high credit risks and weak risk management policies.

Fitch calculated that the ratio of Afreximbank’s non-performing loans (NPLs) exceeded the 6 per cent high-risk threshold outlined in the ratings agency’s criteria.

For Afreximbank, it said in its first quarter operating results ending March 31, the NPLs ratio stood at 2.44 per cent.

APRM in response said the rating was based on a “flawed” categorisation of loans and calling for the decision to be reconsidered.

Mr Mutize also stressed that that the company won’t shy away from downgrades where warranted.

“It is important to debunk the assumption that AfCRA is being established to give favorable ratings to Africa — no,” he said to Bloomberg.