The African Union has launched the Africa Credit Rating Agency (AfCRA) in Mauritius, creating a continent-based alternative to Moody’s, S&P Global Ratings and Fitch as African governments seek to reduce financing costs and improve the accuracy of risk assessments.
The African Union said in a statement on October 7 that AfCRA would provide assessments based on African data, expertise and economic conditions, and the initiative is intended to strengthen the continent’s financial architecture and give investors a broader range of independent credit opinions.
AfCRA will assess sovereign borrowers, financial institutions and private companies, and it is expected to operate independently and be financed through shareholder capital and revenue from its operations.
The agency’s creation follows years of criticism from African governments and regional institutions, which argue that international ratings firms often overstate risks across the continent.
Officials have also complained that downgrades can be issued rapidly during periods of political or economic stress, while upgrades are slower to follow.
The major ratings agencies reject allegations of systematic bias, maintaining that their methodologies are applied consistently worldwide. A 2024 Reuters investigation found no evidence of systemic bias in the sovereign ratings assigned to African countries by the three dominant global firms.
A 2023 United Nations Development Programme study estimated that subjective elements in sovereign credit assessments may have cost African countries up to $74.5 billion through higher borrowing costs and missed financing opportunities.
The AU said Africa’s annual external debt-service payments rose from $61 billion in 2010 to $163 billion in 2024. In some countries, interest payments now exceed annual public spending on health or education, increasing pressure on governments to secure more affordable financing.
AfCRA is also expected to expand coverage in markets that remain largely overlooked by established agencies. The AU estimates that 23 of Africa’s 55 countries do not currently have a rating from Moody’s, S&P Global or Fitch, and broader coverage could help smaller economies, local companies and subnational entities gain access to domestic and international capital markets.
The agency’s launch comes as S&P Global recently agreed to acquire a majority stake in Nigeria-based Agusto & Co., while Moody’s has expanded its regional presence through investments and acquisitions.
The AU Assembly endorsed the creation of AfCRA in 2018, and African leaders reaffirmed their support in a 2023 declaration adopted in Nairobi. Its long-term influence will depend on whether investors, regulators and borrowers accept its assessments as credible and independent.
Rather than replacing the established agencies, AfCRA says it aims to add an African perspective to global financial markets, improve transparency and support the development of deeper domestic debt markets.
