AU to Launch Continent's First Credit Rating Agency

The African Union (AU) is set to launch the Africa Credit Rating Agency (AfCRA) today in a bid to bring a deeper understanding of African economies and markets to the global credit ratings landscape.

Global Trade Review reports that the new agency will focus on strengthening Africa’s financial architecture and closing data gaps to make sure that African firms are “assessed fairly in international financial markets”.

It will be self-funded and independent, and cover sovereign, sub-sovereign and corporate entities, including segments of the African market that remain largely unrated.

One of AfCRA’s mandate will be to “broaden access to credible credit opinions, support access to capital and contribute to the development of stronger domestic financial markets”.

“It also brings an African perspective to the global financial system, where credit ratings play an important role in investment and financing decisions,” the organisation revealed.

The creation of AfCRA was endorsed by the AU Assembly in 2018 and in July 2023, AU leaders adopted a declaration in Nairobi supporting AfCRA.

The rating agency will be formally launched at an event today(Wednesday) in Port Louis, Mauritius, where it will also be headquartered.  

African leaders have long mourned about Western ratings agencies failing to fairly assess the risk of lending to African countries and of moving too quickly to downgrade them during crises such as conflicts and pandemics.