African Export-Import Bank (Afreximbank) today welcomed the launch of the Africa Credit Rating Agency (AfCRA), a significant milestone in strengthening Africa’s financial architecture and building the continent’s capacity to produce credible, independent analysis of African credit risk.
Credit ratings shape access to capital, influence how investors view a market, and affect what governments, institutions and businesses pay to finance development. Assessments of African credit risk must therefore be independent, rigorous and evidence-based, and grounded in a full understanding of the structures, institutions and economic realities being rated.
AfCRA brings an African-led credit opinion to the market. Its worth will be judged not by whether its ratings are more favourable, but by the credibility of its analysis, the quality of its data, the transparency of its methodology, and how far it deepens understanding of African sovereign, sub-sovereign and corporate credit.
This matters because many African issuers remain unrated, and local-currency and sub-sovereign markets still have limited rating coverage. Wider, credible coverage can give investors better information and help deepen domestic and regional capital markets.
Together with fellow members of the Alliance of African Multilateral Financial Institutions (AAMFI), Afreximbank has long maintained that African Multilateral Financial Institutions should be assessed on their fundamentals, performance, legal frameworks, mandates and operating models. Understanding these characteristics properly is key to balanced and credible assessments of African risk.
Speaking on the uniqueness of the African market and the need for AfCRA’s methodology to reflect it, Mr Denys Denya, Senior Executive Vice President, Afreximbank, said: “The rating methodology AfCRA develops must recognise the uniqueness of our environment and its institutional structures. 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.”
On the need for AfCRA’s autonomy as it begins operations, Mr Denya added: “Most importantly, AfCRA must set a new benchmark for the continent, maintain its independence, and remain wholly owned and controlled by Africans. 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.”
AfCRA should be viewed as complementary to existing international and regional rating agencies, widening the range of credible analysis available to investors and issuers while strengthening competition, transparency and analytical capacity in Africa’s credit markets.
As Africa works to mobilise the capital needed for industrialisation, trade, infrastructure and economic transformation, credible African institutions that improve information, build market confidence and deepen financial markets will only grow in importance.
Afreximbank congratulates the African Union, the African Peer Review Mechanism (APRM) and all those who helped bring AfCRA from concept to launch, and looks forward to the Agency’s contribution to deeper, more transparent and more efficient African capital markets.