The African Union is set to launch Africa’s first continent-wide credit rating agency on Wednesday in Port Louis, Mauritius, as African economies seek alternatives to the major global ratings agencies.
The Africa Credit Rating Agency, known as AfCRA, has been nearly a decade in development. African leaders endorsed the creation of the agency in 2018.
According to the AU, AfCRA will provide credit assessments based on African data, expertise and economic realities while complementing existing global credit rating agencies.
AfCRA To Rate Governments, Banks, Companies
The new agency will assess sovereign borrowers, financial institutions and private companies.
The AU said AfCRA will operate independently and be funded through shareholder capital and its operations, although it did not disclose details of its shareholders.
The agency is expected to improve African countries’ access to capital markets by providing investors with additional assessments of economies across the continent.
It will also be able to rate non-African entities where appropriate.
Debt Costs Drive Push For New Agency
The launch comes as rising government borrowing has increased debt pressures across several African economies.
The AU said Africa’s annual external debt service rose sharply from $61 billion in 2010 to $163 billion in 2024.
In some countries, interest payments have exceeded annual government budgets for major social sectors, including health and education.
The AU said AfCRA aims to reduce borrowing pressures by strengthening investor confidence and improving market transparency.
AU Challenges Global Rating Coverage
African leaders have repeatedly criticised major Western-based credit rating agencies, arguing that their assessments do not always adequately reflect the continent’s economic circumstances and that downgrades can come too quickly during major crises.
The agencies have rejected claims of systemic bias, saying they apply the same methodologies globally.
A 2024 Reuters investigation into Africa’s debt crisis found no evidence of systemic bias in sovereign ratings assigned to African countries by the three major global agencies.
The AU also said AfCRA could expand credit-rating coverage across the continent, noting that 23 African economies currently lack ratings from the three major agencies.
