In response to long-standing discontent with international ratings behemoths Fitch, Moody’s, and S&P, the African Credit Rating organisation (AfCRA), a NEW Africa-led credit rating organisation, will launch operations by the end of September 2025. Misheck Mutize, APRM’s lead expert on rating agencies, stated that AfCRA, which was established under the African Union’s African Peer Review Mechanism (APRM), is anticipated to issue its first sovereign credit rating by the end of 2025 or the beginning of 2026. Mutize told reporters that a shortlist has already been created and an appointment is anticipated in the third quarter of 2025, confirming that the hunt for a CEO is nearing its conclusion.
Pushback against global rating bias
Many people believe that the establishment of AfCRA was Africa’s structural reaction to years of deception and harsh ratings from foreign organisations, as stated by officials. Recurring downgrades have been openly challenged by nations like Ghana and Zambia, who claim that they increased their borrowing costs and caused preventable defaults. A recent flashpoint occurred when Fitch Ratings downgraded the African Export-Import Bank (Afreximbank). The APRM strongly objected to the move, calling it both analytically and legally defective. Fitch has defended its approach, claiming that its choices adhere to uniform international norms. However, a growing number of African institutions contend that these norms do not take into consideration local financial systems, sovereign connections, and development mandates.
Private-sector led, politically independent
Mutize emphasised that political interference will have no bearing whatsoever on AfCRA’s governance. This was intended to prevent conflicts of interest and preserve independence. He pushed back against any notion that the agency may be used as a political tool by stating that the majority of the shareholders will be African private sector-driven enterprises. AfCRA, in contrast to the big Western agencies, intends to concentrate on local-currency debt ratings in order to lessen Africa’s reliance on borrowing in foreign currencies and promote the expansion of its domestic capital market. “It is important to debunk the assumption that AfCRA is being established to give favourable ratings to Africa—no,” Mutize said, emphasising that the agency will not serve as a cheerleader for African governments. If downgrades are required, we will provide them.
Global inequality in borrowing costs
The launch comes amid growing criticism of the financial burden African countries face in global credit markets. According to the United Nations Economic Commission for Africa (ECA), biased ratings by agencies headquartered outside the continent have contributed to inflated borrowing costs.
In a statement issued on June 6, ECA Executive Secretary Claver Gatete pointed to the stark disparity in debt servicing costs: ‘Germany can borrow $1bn at 2.29 percent, paying around $229mn in interest over 10 years. In contrast, Zambia may pay up to $2.25bn over the same period for the same amount.’
Gatete warned that these imbalances are fuelled by sub-investment grade or ‘junk’ ratings that fail to reflect Africa’s real economic trajectory. Critics argue that many global credit evaluations ignore local socio-economic factors, misread political contexts, and rely heavily on external benchmarks.
Towards fairer financial assessments
Through the creation of AfCRA, the African Union hopes to increase its authority over the evaluation of African economies, lessen dependency on outside measurements, and promote a more precise, context-sensitive ratings environment. The new organisation will become part of a small but expanding set of organisations driven by developing markets that want to change the global financial system from the inside out. It is unclear if AfCRA will be able to match the size and reputation of the world’s “big three,” but its existence makes it clear that Africa will no longer tolerate being the sole recipient of credit judgements made in other countries.
