The Africa Credit Rating Agency (AfCRA), launched last month with African Union backing to challenge the dominance of the three big global rating agencies, is in talks with 15 African governments and aims to publish its first sovereign ratings by the end of March 2027, interim chief executive Sifiso Falala told Reuters on November 3.
“We will be in a position, by March, before the end of March, to have released results,” Falala said, adding that the agency plans to carry out research in countries including Togo, Kenya, Seychelles, Burundi and Mauritius.
AfCRA will issue solicited sovereign ratings, under which governments pay for the assessment and provide access to officials and financial data. It also plans to rate African multilateral lenders, including the African Export-Import Bank (Afreximbank), and private financial institutions.
The agency is privately owned, and governments cannot hold shares. It is owned by Plus 94 Research, a South African research company co-founded by Falala and Tirhani Mabunda. AfCRA plans to raise $15mn through a share sale that would give African investors a two-thirds stake, Falala said. AfCRA has also acquired a 51% stake in Sovereign Africa Ratings, a South African rating firm founded and run by Falala.
The AU launched AfCRA on October 7 in Port Louis, Mauritius, where it is headquartered, eight years after the AU Assembly endorsed its creation. African leaders have long argued that S&P Global Ratings, Moody’s and Fitch Ratings overstate lending risks on the continent and downgrade countries too quickly during periods of stress, raising governments’ borrowing costs. The AU said at the launch that 23 African economies lack a rating from any of the three.
A 2024 Reuters investigation found no evidence of systemic bias in the three agencies’ ratings of African sovereigns. An IMF study estimated that sub-Saharan African sovereigns paid an average of 46 basis points more than similarly rated borrowers when issuing Eurobonds.
Moody’s, S&P and Fitch deny bias and say they apply their methodologies consistently across markets. Moody’s changed its regional outlook for sub-Saharan African sovereign credit fundamentals to positive on the day AfCRA launched, though only Botswana and Mauritius remain investment grade on its scale, and Mauritius carries a negative outlook.
See IntelliNews: African Union-backed credit rating agency to launch in Mauritius amid dispute over perceived bias
Afreximbank, which AfCRA plans to rate, welcomed the launch. The lender ended its contract with Fitch in January after being downgraded by the agency in 2025; Fitch then cut it to junk before withdrawing its ratings. “The rating methodology AfCRA develops must recognise the uniqueness of our environment and its institutional structures,” Denys Denya, the lender’s senior executive vice-president, said in a statement.
Analysts have said the agency’s credibility will depend on its willingness to downgrade governments that support it. “Credibility in credit rating is accumulated rather than declared,” Daniel Cash, a credit-rating specialist and Reader in Law at the UK’s Aston University, told Semafor before the launch. Nigerian President Bola Tinubu wrote on X in September, ahead of the launch, that “Africa is not asking for favourable ratings”, but for fair ratings grounded in economic fundamentals and reforms.
AfCRA has said it is intended to complement rather than replace the international agencies, and that it will not rate African governments more favourably simply because they are African. Its first assessments will be an early test of whether investors and regulators incorporate its ratings into the pricing of African risk.
See IntelliNews: Afreximbank says Fitch misjudged funding diversification and liquidity
See IntelliNews: Moody’s turns positive on sub-Saharan African sovereigns as debt and borrowing needs ease
Source: www.intellinews.com
