The African Union is set to launch the Africa Credit Rating Agency (AfCRA) in Port Louis, Mauritius, on Wednesday, 07 October 2026. This move comes eight years after the African Union first endorsed the creation of the agency. The AfCRA aims to provide an alternative to leading global ratings agencies, offering a perspective rooted in African data, expertise, and realities.
The launch of AfCRA is a significant development in the continent's financial landscape. African leaders and finance experts have previously accused Western ratings agencies, such as S&P Global Ratings, Moody's Ratings, and Fitch Ratings, of failing to fairly assess the risk of lending to African countries. They claim that these agencies move too quickly to downgrade African countries during crises such as conflicts and pandemics.
The African Union believes that AfCRA will help improve African countries' access to capital markets and provide investors with more balanced and context-specific assessments of economies across the continent. The agency will operate independently and be funded through shareholder capital and its operations. It will rate sovereign borrowers, financial institutions, and private companies.
A 2024 Reuters investigation into Africa's debt crisis found no evidence of systemic bias in the sovereign ratings assigned by the three major global credit rating agencies. However, the African Union argues that AfCRA will provide a more nuanced understanding of African economies. The agency will also rate non-African entities where appropriate.
The drive to improve borrowing terms for the continent has become more urgent following years of increased government borrowing, which has pushed some countries into debt distress. The African Union notes that the continent's annual external debt service surged to €145.5 billion in 2024, from €54.48 billion in 2010. In many countries, interest payments have exceeded the annual budgets for key social sectors such as health and education.
The African Union expects AfCRA to boost coverage, with 23 economies on the continent lacking a rating from the three big agencies. The agency aims to reduce the burden of debt service by improving investor confidence and market transparency. This development is seen as a significant step towards enhancing the continent's financial stability and promoting economic growth.
The launch of AfCRA marks a significant milestone in the African Union's efforts to promote economic development and financial stability on the continent. The agency is expected to play a critical role in providing more accurate and context-specific ratings, which will help to improve investor confidence and reduce borrowing costs for African countries.
Key points
- The African Union is launching the Africa Credit Rating Agency to provide an alternative to global ratings agencies.
- The agency aims to improve African countries' access to capital markets and provide more balanced assessments of economies across the continent.
- The launch of AfCRA is seen as a significant step towards enhancing the continent's financial stability and promoting economic growth.
