Africa is set to debut its first independent credit rating agency, AfCRA, by September 2025, aiming to offer fairer assessments of African economies.
Backed by the AU’s APRM, the agency will focus on local-currency debt ratings and provide an alternative to Fitch, Moody’s, and S&P, with credibility rooted in independence.
In a historic move set to reshape Africa’s financial landscape, the continent is preparing to roll out its own credit rating institution, the African Credit Rating Agency (AfCRA), by the end of September 2025. The new agency aims to provide an African alternative to the long-dominant global “big three”: Fitch, Moody’s, and Standard & Poor’s.
AfCRA is spearheaded by the African Peer Review Mechanism (APRM), an African Union initiative. According to Misheck Mutize, the APRM’s lead expert on credit rating agencies, AfCRA is currently in the final stages of selecting its chief executive officer, with a shortlist already in place. The agency is expected to issue its first sovereign credit rating by the end of 2025 or early 2026.
A bold response to global ratings discontent
The birth of AfCRA is more than administrative; it is a political and economic statement. For years, African policymakers have voiced strong disapproval over the treatment of their economies by international credit rating firms. Countries like Ghana and Zambia have accused these agencies of unfair downgrades, arguing that such moves have inflated borrowing costs and even contributed to debt defaults.
The APRM recently confronted Fitch Ratings over its decision to downgrade the African Export-Import Bank (Afreximbank), accusing the agency of flawed analysis and poor grasp of the local financial context. Fitch, however, defended its rating criteria as globally consistent and transparent.
Still, critics argue that global agencies often fail to capture Africa’s nuanced realities, instead evaluating through an external and sometimes detached lens.
Guarding credibility with independence
To maintain credibility and avoid political interference, AfCRA’s structure has been designed to ensure independence. “AfCRA will not be owned by African governments,” Mutize clarified. “Ownership will rest mainly with private sector entities within the continent.”
This approach aims to remove any conflict of interest and secure the agency’s long-term trustworthiness. While AfCRA will provide an African perspective, Mutize insists it will maintain professional integrity by delivering fair and evidence-based assessments, favorable or otherwise. “We will issue downgrades where necessary. The idea isn’t to sugarcoat Africa’s financial reality,” he said.
AfCRA’s initial focus will be on local-currency debt ratings, an area that holds promise for bolstering Africa’s domestic capital markets. By encouraging more reliance on local currencies rather than foreign-denominated debt, the agency hopes to help reduce the exposure of African economies to external shocks.
Levelling the playing field
The United Nations Economic Commission for Africa (UNECA) has repeatedly voiced concerns over how global credit ratings unfairly disadvantage African nations. UNECA’s Executive Secretary, Claver Gatete, highlighted the deep cost imbalance, explaining that while Germany can borrow $1 billion at a 2.29% interest rate, Zambia may pay as much as $2.25 billion in interest for the same amount due to being tagged as “sub-investment grade.”
“Many African countries are burdened with ‘junk’ ratings that do not reflect their true economic potential,” Gatete stated.
By placing the power of economic assessment into African hands, AfCRA promises a more informed, fair, and contextual approach to rating the continent’s economies, a move many say is long overdue.
