Africa Launches New Credit Rating Agency in Push for Lower Borrowing Costs
The African Union is set to launch the Africa Credit Rating Agency (AfCRA) in Mauritius on Wednesday, marking a major step in the continent’s effort to reshape how African economies are assessed by international investors. The agency is expected to provide credit assessments based on African economic conditions and data, offering an alternative to the major global rating firms.
The initiative comes as African countries face mounting debt obligations and high borrowing costs. The AU said Africa’s external debt service rose sharply from $61 billion in 2010 to $163 billion in 2024, with debt payments consuming funds that could otherwise support sectors such as healthcare and education. AfCRA is expected to assess governments, financial institutions and private companies and help expand access to capital markets.
The agency has been in development for several years, with African leaders backing its creation in 2018. The AU said it will operate independently and rely on shareholder capital and operational revenue for funding. It also expects the agency to increase credit coverage across the continent, where 23 economies currently do not have ratings from the three major global agencies.
The launch reflects a broader African push for greater influence over the financial narratives that shape investor decisions about the continent. While African leaders have repeatedly criticised international rating agencies for assessments they consider too harsh during periods of economic or political crisis, the major firms have rejected allegations of systematic bias. AfCRA will therefore face the challenge of building credibility with investors while demonstrating that an Africa-focused rating system can provide independent and reliable assessments.
