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The launch of the Africa Credit Rating Agency (AfCRA) could help deepen African capital markets and improve access to financing by providing investors with independent assessments of the creditworthiness of governments, companies and institutions, the African Export-Import Bank (Afreximbank) said on Thursday.
Credit ratings play a key role in determining how investors assess risk and the cost at which borrowers can access capital.
Afreximbank said greater coverage of African issuers could improve market information and support the development of domestic and regional capital markets.
Many African issuers remain unrated, while local-currency and sub-sovereign markets have limited rating coverage, the bank said.
The launch of AfCRA, therefore, adds an African-led source of credit analysis to a market where borrowers have traditionally relied heavily on international rating agencies.
Afreximbank Senior Executive Vice President, Denys Denya, said the new agency’s methodology should reflect the economic and institutional characteristics of African markets rather than simply replicate approaches developed elsewhere.
“The rating methodology AfCRA develops must recognise the uniqueness of our environment and its institutional structures,” Denya said.
“The Agency must set its own standards and not follow those set elsewhere – it must build a unique identity that conforms to an ‘African best practice’,” he added.
Afreximbank said AfCRA’s credibility would ultimately depend on the quality of its analysis, data and transparency rather than whether it delivered more favourable ratings for African borrowers.
Denya said maintaining the agency’s independence would be critical to building investor confidence.
“Most importantly, AfCRA must set a new benchmark for the continent, maintain its independence, and remain wholly owned and controlled by Africans,” he said.
The bank said credible ratings could help investors better understand both the strengths and weaknesses of African economies and institutions, potentially supporting more informed investment decisions.
“We must all use it, and in return expect a complete assessment of where we (Africa) stand: the strengths the market has ignored, and the weaknesses we still need to fix,” Denya said.
The bank said African Multilateral Financial Institutions should be assessed on the basis of their fundamentals, performance, legal frameworks, mandates and operating models, arguing that these factors were important in producing balanced assessments of African risk.
AfCRA is expected to operate alongside existing international and regional rating agencies, broadening the range of credit opinions available to investors and issuers.
Afreximbank said stronger credit-rating coverage would become increasingly important as African countries seek to mobilise financing for infrastructure, industrialisation, trade and broader economic transformation.
The bank welcomed the role of the African Union, the African Peer Review Mechanism and other stakeholders in bringing AfCRA from concept to launch.
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