The African Union (AU) has launched the Africa Credit Rating Agency (AfCRA), the continent’s first credit rating agency as it seeks to provide an alternative to the global ‘big three’ ratings firms as debt burdens weigh on many African economies.
The agency, whose creation was endorsed by African leaders in 2018, was launched in Port Louis, Mauritius, where it will be based. The AU says AfCRA will provide independent, Africa-focused assessments rooted in the continent’s data, expertise, and economic realities, complementing rather than replacing existing global ratings agencies.
African leaders have long accused major Western ratings agencies including
S&P Global,
Moody’s, and
Fitch
of failing to adequately reflect the risks and potential of African economies and of moving too quickly to downgrade countries during crises such as conflicts and pandemics.
The agencies reject that criticism saying they apply the same methodologies globally. A 2024 Reuters investigation into Africa’s debt crisis found no evidence of systemic bias in the sovereign ratings assigned to the region by the three major agencies.
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Rating experts said AfCRA’s success will depend on its ability to establish credibility with investors particularly during periods of financial stress.
“A new rating agency begins with a promise while investors ultimately require a track record,” said Dennis Shen, a lecturer in finance at the International School of Management in Berlin and a former sovereign analyst at Scope Ratings.
“The hardest test, however, will come when markets are under stress, because a rating agency’s credibility is tested most severely when its conclusions are uncomfortable rather than when it is highly convenient.”
Former Nigerian Vice President, Yemi Osinbajo, said AfCRA could provide a counterweight to established ratings agencies but would need to meet global standards.
“It can’t just be a chauvinistic or nationalistic agency,” he said.
AfCRA will rate
sovereign borrowers,
financial institutions, and
private companies.
The AU said the agency will operate independently and be funded through shareholder capital and its operations, although it did not provide details of its shareholders.
The AU says the agency is intended to improve African countries’ access to capital markets and provide investors with more balanced and context-specific assessments of economies across the continent.
African economies are currently rated B to B-minus on average compared with BB for other emerging regions, according to the AU which says the gap can limit investor participation and increase borrowing costs.
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The push to improve financing terms has become more urgent after years of rising government borrowing pushed several African countries into debt distress.
The AU said Africa’s annual external debt service reached $163 billion in 2024 up from $61 billion in 2010. In some countries, interest payments have exceeded annual budgets for key social sectors such as health and education.
AfCRA is also expected to expand ratings coverage with 23 African economies currently lacking a rating from the three major global agencies, the AU said.
The agency’s establishment forms part of broader African efforts to
reform the international financial architecture,
strengthen domestic capital markets, and
improve access to financing.
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