The African Union has launched the Africa Credit Rating Agency (AfCRA), a continental body set up to give investors an alternative assessment of the credit risk of African governments and companies. The agency was inaugurated on 7 October in Balaclava, north of Port Louis in Mauritius, where it will have its headquarters.
The launch follows years of complaints from African leaders that S&P Global Ratings, Moody’s and Fitch Ratings overstate the risk of lending to the continent. They argue that this adds a premium to borrowing costs and reduces the money available for development. According to Reuters, the three agencies reject claims of bias and say they apply the same methodologies worldwide.
AfCRA will rate sovereigns, subnational borrowers, companies, and public and private institutions, including many that have never been rated. The AU says 23 of its 55 member states have no rating from the three major agencies.
| Indicator | Figure |
|---|---|
| Africa’s external debt service, 2010 | $61bn (about R1tn) |
| Africa’s external debt service, 2024 | $163bn (about R2.7tn) |
| AU members without a Big Three rating | 23 of 55 |
| African sovereigns rated investment grade (2025) | 2 (Botswana and Mauritius) |
| UNDP estimate of the cost of rating distortions | $74.5bn (about R1.2tn) |
| Share of global debt rated by the Big Three | More than 95% |
The cost of debt is central to the case for the agency. AU figures show that Africa’s annual external debt service rose from $61bn (about R1tn) in 2010 to $163bn (about R2.7tn) in 2024. The UN Development Programme has estimated that rating distortions cost African countries as much as $74.5bn (about R1.2tn) in excess interest and lost financing.
AU Commission chairperson Mahmoud Ali Youssouf described the agency as part of a broader drive for African financial sovereignty. He cautioned, however, that it would not significantly lower the cost of capital in the near term, and said wider reform of global financial markets was also needed.
Youssouf credited the African Peer Review Mechanism (APRM) with leading the consultations, technical studies and institutional design. He said Mauritius’s economic and financial environment gave the agency a sound base, and regional subsidiaries are planned. South African research firm Plus94 is supporting the technical set-up, which the AU says will allow the methodology to account for African economic conditions while meeting international standards. Trade finance publication GTR reports that the agency will be self-funded.
The UN Economic Commission for Africa said AfCRA would widen access to credit assessments and help develop domestic financial markets. The agency’s stated aims include building African expertise, improving understanding of the continent’s economies and assessing their risks objectively.
The idea has a long history. The AU Assembly endorsed the agency in 2018, and leaders backed it in a declaration adopted in Nairobi in July 2023. Planned launch dates in late 2023 and 2025 both slipped. Tensions rose in 2025 when Fitch downgraded the African Export-Import Bank to BBB-, the lowest investment-grade rating, a move the APRM criticised.
Analysts at the German Institute for International and Security Affairs (SWP) say the agency faces significant hurdles. Big Three ratings are written into financial regulation and investment mandates. Newer entrants such as Japan Credit Rating Agency and DBRS Morningstar took years to win international recognition. AfCRA will also compete with established African raters, including Bloomfield, Augusto & Co and GCR, which is owned by Moody’s. No date has been set for its first ratings.