A new credit rating agency is set to begin operations this September, aiming to offer an alternative to the global “big three” agencies, Fitch, Moody’s, and S&P.
Known as the African Credit Rating Agency (AfCRA), the new agency institution will release its first independent rating by late 2025 or early 2026, according to Misheck Mutize, lead expert on credit rating agencies at the African Peer Review Mechanism (APRM), a structure under the African Union.
The AfCRA is being created in response to the somewhat questionable nature of how international bodies assess Africa’s credit rating. Countries like Ghana and Zambia have expressed reservations about the credit rating modalities which, they argue, contributed to rising borrowing costs and eventual debt defaults.
In fact, recently, the APRM challenged Fitch Ratings over its downgrade of the African Export-Import Bank (Afreximbank), accusing the firm of a flawed analysis and a poor understanding of African financial institutions.
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However, Fitch defended its methodology, saying its decisions follow globally consistent and transparent criteria.
Therefore, AfCRA plans to focus primarily on local-currency debt ratings, which experts say will play a major role in boosting Africa’s domestic capital markets and cutting over-reliance on foreign currency-denominated debt.
