The African Union (AU) has launched the Africa Credit Rating Agency (AfCRA), a continent-wide credit rating institution designed to provide an African alternative to global giants Moody’s, S&P Global Ratings and Fitch Ratings amid rising debt pressures across the continent.
AfCRA was officially launched on Wednesday, October 7, in Port Louis, Mauritius, where it will be headquartered. The agency is expected to rate sovereign governments, financial institutions and private companies, while retaining the option to assess non-African entities subject to management approval.
The establishment of AfCRA follows years of calls by African leaders for a homegrown rating institution that can assess African economies using local data, expertise and economic realities. The AU approved the creation of the agency in 2018, although its launch came about a year later than the timetable proposed in 2025.
The initiative comes as African countries face mounting borrowing costs and growing debt-service obligations. According to the AU, the continent’s annual external debt service increased from $61 billion in 2010 to $163 billion in 2024, with interest payments in some countries now exceeding their spending on health or education.
The AU said African economies are rated between B and B- on average, compared with an average of BB for other emerging-market regions. It argues that the lower ratings can restrict access to international investment and increase the cost of borrowing.
AfCRA is also expected to address the continent’s significant rating gap. While 32 of Africa’s 55 countries currently have sovereign ratings from the three major international agencies, 23 remain unrated by them, potentially limiting their access to international capital markets.
African governments and officials have repeatedly accused major Western rating agencies of applying overly negative assessments to the continent, particularly during periods of economic or political crisis. They argue that African countries are often downgraded rapidly during periods of stress but are slower to benefit from upgrades when conditions improve.
The agencies, however, have rejected allegations of systemic bias, insisting that they apply the same methodologies globally. A 2024 Reuters investigation found no evidence of systemic bias in the sovereign ratings assigned by the three major agencies to African countries.
A 2023 United Nations Development Programme study estimated that subjective elements in sovereign credit ratings could have cost African countries as much as $74.5 billion through higher borrowing costs and missed financing opportunities.
AfCRA will operate independently, with the AU saying governments will not be permitted to hold shares in the agency in order to shield it from political influence. It will be financed through shareholder capital and revenue generated from its operations, although its shareholder structure has not been disclosed.
The African Peer Review Mechanism, which oversaw the agency’s establishment, is expected to allow AfCRA to operate autonomously. South African firm Plus94 is providing technical assistance, including support for the development of its rating methodology.
AfCRA enters an increasingly competitive African credit-rating market. GCR Ratings, based in South Africa, is now wholly owned by Moody’s, which acquired the remaining stake in 2024 after taking control of the company in 2022. Moody’s has also expanded its presence through Egypt’s MERIS.
S&P Global announced in July that it would acquire a majority stake in Nigeria-based Agusto & Co, a prominent regional rating agency operating across several African markets. Other established players include Abidjan-based Bloomfield Investment Corporation.
Unlike many existing regional agencies that focus largely on companies, financial institutions and local issuers, AfCRA is positioning itself as a continental institution with the capacity to provide sovereign ratings.
The launch marks a significant attempt by African governments to gain greater influence over how the continent’s economic risks are assessed. Its success, however, will ultimately depend on whether international investors regard its ratings as sufficiently independent, credible and comparable with those issued by the established global agencies.
