Africa’s new credit rating agency, the Africa Credit Rating Agency (AfCRA), is in discussions with 15 African governments and expects to publish its first sovereign credit assessments by the end of March 2027, as it seeks to challenge the dominance of global rating agencies on the continent.
The Mauritius-based agency, launched last month following an African Union initiative dating back to 2018, plans to begin research in countries including Togo, Kenya, Seychelles, Burundi and Mauritius.
Its interim Chief Executive, Sifiso Falala, who disclosed this in an interview with Reuters said “We will be in a position, by March, before the end of March, to have released results,” Falala said.
AfCRA’s entry into the market comes amid longstanding concerns among African governments that assessments by the world’s three largest credit rating agencies — S&P Global Ratings, Moody’s and Fitch Ratings — do not adequately reflect the continent’s economic realities and could intensify borrowing pressures during periods of financial stress.
However, the three international agencies have consistently rejected allegations of systematic bias against African countries, maintaining that they apply the same rating methodologies across markets. A 2024 Reuters investigation into Africa’s debt crisis also found no evidence of systemic bias in their sovereign ratings.
Nevertheless, the cost of borrowing remains a significant challenge for African economies, many of which are grappling with mounting debt-service obligations and limited access to affordable financing. Poor credit ratings can increase the interest rates governments must offer investors on their bonds while limiting their access to certain institutional investors, further raising the cost of securing funds.
Falala described the continent’s borrowing costs as a major economic burden, citing estimates that African economies pay an additional $75 billion annually in interest compared with borrowers in other regions.
He estimated Africa’s total debt at approximately $1.9 trillion, while African Union figures indicate that the continent’s annual external debt-service obligations increased to $163 billion in 2024, from $61 billion in 2010.
Against this backdrop, AfCRA intends to offer an additional perspective on African creditworthiness, relying more heavily on research conducted within the continent and less on data from international financial institutions, including the International Monetary Fund.
“What Africa needs is thorough research,” Falala said.
The agency plans to issue solicited sovereign ratings, under which governments pay for assessments and provide access to officials and relevant financial information as it also intends to assess African multilateral financial institutions, including the African Export-Import Bank (Afreximbank), as well as private financial institutions.
AfCRA’s approach will test whether a locally established rating agency can develop the credibility and investor confidence required to influence how African borrowers are assessed. However, its success will depend not simply on its understanding of local economic conditions but also on the transparency, consistency and independence of its rating methodologies.
Although privately owned, the agency has excluded African governments from share ownership. It is owned by Plus 94 Research, a South African research company co-founded by Falala and Tirhani Mabunda. According to Falala, AfCRA plans to raise $15 million through a share sale that would give African investors a two-thirds stake in the company.
The agency has also completed the acquisition of a 51 per cent stake in Sovereign Africa Ratings, a South African credit rating firm founded and managed by Falala.
AfCRA’s first sovereign assessments will provide an important indication of whether it can translate its ambition into a credible alternative within Africa’s financial landscape, while the continent needs greater control over how its economic prospects and credit risks are evaluated, challenging established international agencies will require more than a different geographical perspective.
However, investors and lenders must be convinced that AfCRA’s assessments are independent, transparent and grounded in rigorous research. Without such confidence, the agency risks becoming another institutional voice in Africa’s financial system without significantly changing the borrowing realities it seeks to address.
