The African Union (AU) will inaugurate the continent’s first credit rating agency on Wednesday, seeking to provide an alternative to the three major global ratings agencies amid rising debt burdens across African economies.
The Africa Credit Rating Agency (AfCRA) will be inaugurated in Port Louis, Mauritius, where it will be based.
The project has been nearly a decade in the making, with African leaders endorsing its creation in 2018.
The AU said AfCRA would complement existing global credit rating agencies by providing assessments based on African data, expertise and realities.
African leaders have long accused Western ratings agencies of failing to fairly assess lending risks in African countries and of downgrading them too quickly during crises such as conflicts and pandemics.
The agencies have rejected the criticism, saying they apply the same methodologies globally. A 2024 Reuters investigation into Africa’s debt crisis found no evidence of systemic bias in the sovereign ratings assigned to the region by the three major global credit rating agencies.
AfCRA will rate sovereign borrowers, financial institutions and private companies. According to the AU, it will operate independently and be funded through shareholder capital and its operations, although the bloc did not provide details about its shareholders.
The AU said the agency was expected to improve African countries’ access to capital markets and provide investors with more balanced and context-specific assessments of economies across the continent.
The push to improve borrowing terms has become more urgent following years of increased government borrowing, which has pushed some countries into debt distress.
The AU said Africa’s annual external debt service rose to 163 billion dollars in 2024 from 61 billion dollars in 2010, with interest payments exceeding annual budgets for key social sectors such as health and education in some countries.
“AfCRA aims to reduce such burdens by improving investor confidence and market transparency,” the AU said, adding that the agency would also rate non-African entities where appropriate.
The AU said AfCRA was also expected to expand coverage, with 23 African economies currently lacking ratings from the three major global agencies.
