African ratings company plans to launch in third quarter

The African Credit Rating Agency, a continental initiative to provide alternative assessments of repayment risks, plans to start operations by the end of September.

The agency will publish its first sovereign rating report by the end of the year or early 2026, said Misheck Mutize, lead expert on credit-rating companies at the African Peer Review Mechanism, an African Union structure. It will appoint a chief executive officer in the third quarter, and candidates have already been shortlisted, he said last week.

The initiative emerged from repeated criticism of the “big three” ratings companies — Fitch Ratings, Moody’s Ratings and S&P Global Ratings — by African governments, who’ve accused them of bias and a lack of transparency. The so-called AfCRA will seek to address that issue by having a presence on the continent, though it faces the challenge of convincing investors its own assessments won’t be unduly positive.

Several African governments, municipalities and companies have expressed an interest in getting rated, said Mutize.

The APRM last week questioned Fitch’s downgrading of African Export-Import Bank, saying the decision was flawed and reflected a “misunderstanding of the governance architecture of African financial institutions.” The ratings company said all its supranational assessments are taken in accordance with globally consistent and publicly available rating criteria.

The governments of Ghana and Zambia have in recent years lashed out at ratings companies for downgrades. Both went on to default on their loans.

AfCRA won’t count states among its owners, Mutize said in response to emailed questions.

“This was designed to maintain independence and avoid conflict of interest,” he said. “Shareholding will mainly be African private-sector driven entities.”

Mutize declined to identify them as negotiations are ongoing. MCB Capital Markets, a unit of the biggest Mauritian lender, is AfCRA’s transaction adviser.

The new company will focus on local-currency debt ratings. That will help support the development of domestic capital markets and reduce foreign currency risk on the continent, said Mutize, stressing that that the company won’t shy away from downgrades where warranted.

“It is important to debunk the assumption that AfCRA is being established to give favorable ratings to Africa — no,” he said.

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