Adedapo Adesanya
By Adedapo Adesanya
The global credit rating agency, Fitch Ratings, has affirmed the African Development Bank’s (AfDB) Long-Term Issuer Default Rating (IDR) at ‘AAA’, with a stable outlook.
According to the agency, “the affirmed rating of the AfDB is driven by extraordinary support it receives from its shareholders, which Fitch Ratings assess at ‘AAA’”.
It also said it judged the bank’s risk management policies as conservative and excellent in line with ‘AAA’ rated regional peers.
The agency said the bank’s liquidity profile reflects an excellent liquidity buffer and quality of liquid assets while it noted that the bank’s capitalisation is judged strong as it reflects strong equity-to-asset ratio.
Fitch “assumes a 125 per cent in subscribed capital from 2021 as per the Bank’s 7th General Capital Increase plan approved in October 2019”, noting that it “expects all non-regional shareholders will make their first payments before October 2021”.
Commenting on this development, the AfDB President, Mr Akinwumi Adesina, expressed his delight and satisfaction which aligns with its peers globally.
“We are delighted with the affirmation of the ‘AAA’ rating of the Bank, with a stable outlook, by Fitch Ratings, despite the global and regional economic challenges from the COVID-19 pandemic.”
In April 2020, the bank’s board of directors approved a group-wide up to $10 billion COVID-19 Response Facility to be made available to current borrowers to ease the economic impact of the COVID-19 crisis.
“We will continue to strengthen our policy relevance to support regional member countries, especially during and after the period of COVID-19, while ensuring that we maintain our prudential ratios with adequate buffers.
“The Bank will continue to apply strong risk management. We are positive that African countries’ economies will recover as the pandemic subsides and Africa returns to a positive GDP growth trajectory,” Mr Adesina added.
Also, Mrs Swazi Tshabalala, the Vice President for Finance and Chief Finance Officer at the African Development Bank said, “The strong support of our shareholders will continue to be critical to allow the Bank to continue to play its leading role in supporting development in Africa.”
The ‘AAA’ rating with a stable outlook of the African Development Bank by Fitch Ratings follows an earlier affirmation of the ‘AAA’ rating of the Bank, with a stable outlook, by Standard and Poor’s Global Ratings.
