AFRICA is is set to launch its own credit rating agency, the Africa Credit Rating Agency (AfCRA), in June, marking a major step towards financial independence and fairer credit assessments. The initiative, backed by the African Union (AU), aims to counter biases in global credit ratings that critics argue misrepresent the continent’s economic strength.
Speaking at a presidential breakfast dialogue in Addis Ababa, Kenyan President William Ruto stressed the need for a rating system that accurately reflects Africa’s financial realities.
‘It is time for Africa to use the right scale, one that reflects its true weight,’ Ruto stated.
The event, held in Ethiopia’s capital, brought together several African leaders, including Algeria’s President Abdelmadjid Tebboune, Ethiopia’s representative Taye Atske Selassie, and Zambia’s President Hakainde Hichilema.
Addressing global rating biases
Currently, African nations rely on international rating agencies, such as Moody’s, Fitch, and S&P, which many argue undervalue their economies. Lower ratings often translate to higher borrowing costs, making it more expensive for African nations to secure funds for infrastructure, social services, and development projects.
According to a United Nations Development Programme (UNDP) study, African nations overpay by an estimated $75 billion in interest costs due to unfair credit ratings.
AfCRA aims to bridge this gap by offering a transparent, development-focused approach to credit ratings, ensuring assessments are aligned with Africa’s economic realities.
Boosting economic growth and reducing dependence on aid
Improving Africa’s credit ratings could have major financial benefits. Ruto highlighted that even a one-notch upgrade could unlock an additional $15.5bn in funding—money that could be reinvested into critical sectors like infrastructure, healthcare, and education.
The launch of AfCRA signals a strategic shift towards self-reliance, reducing the continent’s dependence on external credit agencies and allowing African economies to compete on a fairer global scale.
With its official launch set for June, AfCRA is expected to reshape Africa’s financial landscape, giving nations greater control over their economic futures and paving the way for a stronger, more independent Africa.
