Africa is set to establish its own credit rating agency, the African Credit Rating Agency (AfCRA), as part of a bold move to challenge the dominance of global rating giants — Fitch, Moody’s, and Standard & Poor’s — whose assessments have long been criticised as unfair and damaging to the continent’s economies.
The decision to create AfCRA comes amid growing dissatisfaction among African policymakers, economists, and finance ministers, who argue that the current rating system does not accurately reflect the realities of African economies. They say global agencies often issue downgrades based on narrow perspectives that ignore positive reforms and potential, thereby raising borrowing costs for African nations.
In February this year, African leaders and top financial experts met on the sidelines of the 37th African Union (AU) Ordinary Summit to finalise the modalities for the establishment of AfCRA. The event highlighted a shared desire to enhance the continent’s financial sovereignty and promote more balanced, context-sensitive credit assessments.
The new agency is expected to provide credit ratings that are fair, transparent, and focused on development. The ratings will better reflect the economic environments, unique socio-political dynamics, and reform efforts of African countries. Promoters of the AfCRA said the agency will help change the narrative and end the cycle of costly downgrades that have led to financial instability in many African countries.
Lead expert on credit rating agencies at the African Peer Review Mechanism (APRM), Dr. Misheck Mutize, said the agency is currently in its final preparatory stages, including the selection of a chief executive officer. A shortlist has already been drawn up, and an appointment is expected by the third quarter of this year.
Speaking on the rationale behind AfCRA, Dr. Mutize noted that global agencies have often relied on models that do not fully capture Africa’s investment climate or policy directions. “The ratings from the big three have been questioned for lacking accuracy and objectivity when it comes to Africa. Some countries feel unjustly downgraded, which makes it more expensive to borrow and can even trigger defaults,” he said.
He cited examples of countries like Ghana and Zambia, which have both openly criticised the methodology used by global agencies. Ghana, for instance, suffered a string of downgrades during its debt restructuring programme, while Zambia’s ratings worsened despite fiscal consolidation efforts.
One major step taken to preserve AfCRA’s credibility is its ownership structure. Dr. Mutize explained that, unlike global agencies, AfCRA will not be owned or controlled by African governments. “To ensure independence and avoid political interference, the shareholding will primarily come from African private-sector entities. This will give it the objectivity needed to gain trust in global financial circles,” he said.
AfCRA is also expected to concentrate on local-currency debt ratings. Mutize believes this focus is essential for the development of Africa’s domestic capital markets and will help reduce overdependence on foreign currency borrowing, which often leaves countries exposed to external shocks and exchange rate risks.
He also dismissed suggestions that AfCRA was being set up merely to give favourable ratings to African countries. “That is a misconception. Our mission is to provide accurate and fair ratings based on comprehensive data and a deep understanding of the African context. AfCRA is not about sugar-coating realities but offering balanced assessments that international investors can trust,” he added.
The establishment of AfCRA is being viewed by analysts as a landmark moment in Africa’s financial development journey. It is expected to encourage capital inflows, support fiscal planning, and help African countries tell their own economic stories through credible, Africa-informed assessments.
With support from the African Union and regional economic communities, AfCRA will complement ongoing financial reforms and work alongside global institutions to promote a more equitable financial architecture for the continent.
