Africa is moving to take control of its narrative in global finance, as a new continental credit rating agency is set to begin operations by September 2025.
Known as the African Credit Rating Agency (AfCRA), the initiative aims to challenge what African leaders and economists see as systemic bias by the world’s top rating firms—Moody’s, S&P, and Fitch.
The African Union-backed agency is being developed under the African Peer Review Mechanism (APRM) and will issue its first sovereign credit rating between late 2025 and early 2026, according to Misheck Mutize, lead expert on credit rating agencies at the APRM. Currently, AfCRA is finalizing the selection of its first CEO, with an appointment expected before the end of the third quarter of 2025.
A Response to Decades of Criticism
The launch of AfCRA marks a significant policy and economic milestone, built on long-standing frustration with how global rating firms evaluate Africa’s economies. Countries such as Ghana, Zambia, and Nigeria have frequently criticized these firms for downgrades they say are based on flawed assumptions, externalized perceptions, and inadequate understanding of the continent’s unique risks and opportunities.
In the case of Zambia, which defaulted on its Eurobond payments in 2020, officials partly blamed international rating downgrades for triggering a self-fulfilling debt spiral that scared off investors and hiked borrowing costs. Similarly, Ghana, which defaulted in 2022, has argued that pessimistic ratings fuel speculation and restrict access to credit long before countries face actual fiscal collapse.
In a more recent example, the African Peer Review Mechanism directly challenged Fitch Ratings for its downgrade of the African Export-Import Bank (Afreximbank). The APRM accused Fitch of poor analysis and a “misunderstanding of African institutions.” Fitch responded by defending its methodology as globally consistent and transparent.
Safeguarding Independence
Unlike the major international rating agencies—often accused of being shaped by geopolitical interests—AfCRA will not be state-owned, Mutize said.
“This was designed to maintain independence and avoid conflict of interest. Shareholding will mainly be African private-sector driven entities,” he explained.
AfCRA’s governance structure is intended to shield the agency from political interference while also making its operations more transparent and locally informed. Crucially, it aims to be objective and credible, with Mutize emphasizing that AfCRA is not being designed to provide inflated scores.
“It is important to debunk the assumption that AfCRA is being established to give favorable ratings to Africa. No. We will issue downgrades where necessary,” he said.
Focusing on Local Currency Ratings
A key feature of AfCRA will be its focus on local-currency debt ratings, a shift that could have significant implications for Africa’s financial sovereignty. AfCRA hopes to bolster domestic capital markets and reduce overreliance on costly foreign-currency borrowing, which exposes economies to exchange-rate shocks and repayment risks, by prioritizing local-currency evaluations.
This approach aligns with the growing call among African financial institutions to de-dollarize debt and tap into local savings, pension funds, and regional capital pools for long-term infrastructure and development financing.
UN and ECA Back Africa’s Push
The agency is also being launched with strong support from global institutions like the United Nations Economic Commission for Africa (ECA). Claver Gatete, ECA’s Executive Secretary, recently criticized the current credit rating landscape, saying that African nations are being saddled with disproportionately high borrowing costs due to being consistently rated “junk” by the dominant agencies.
Gatete pointed out the disparity in real terms: while Germany can borrow $1 billion at a 2.29% interest rate—translating to about $229 million in interest over a decade—Zambia, under current credit conditions, would pay as much as $2.25 billion in interest for the same amount, nearly ten times more.
He warned that credit ratings continue to be shaped by external biases and often fail to incorporate a nuanced understanding of African political economies.
According to Gatete, most major rating agencies are headquartered outside Africa and often assess the continent through an external lens.
Many believe that these “outside-in” assessments ignore internal structural reforms, fail to recognize regional resilience, and ultimately make it more expensive for African countries to access the capital they need to grow.
A First of Its Kind
While the idea of an Africa-led credit rating agency has circulated for years, AfCRA is the first such effort poised to become operational, with institutional backing, private sector involvement, and a clearly stated regulatory agenda. What sets it apart is not just its continental scope, but the fact that it will actively rate sovereign risk with a mandate rooted in fairness, transparency, and context.
Although various African governments and financial institutions have voiced concerns about rating bias in the past, this marks the first time a coordinated response of this scale is materializing—one that may also indirectly shape the standards and expectations of international agencies operating on the continent.
