African Union has taken a major step towards reshaping how its economies are assessed in international financial markets with the launch of the continent’s first credit rating agency, an initiative aimed at providing an Africa-focused alternative to the dominant global ratings institutions and addressing concerns over the high cost of borrowing.
The Africa Credit Rating Agency (AfCRA) is being launched in Port Louis, Mauritius, nearly a decade after African Union leaders endorsed the idea of establishing an institution capable of assessing the continent’s creditworthiness from an African perspective.
The agency will rate sovereign governments, sub-sovereign entities, financial institutions, corporations and other public and private institutions, with the African Union expecting its activities to widen access to capital markets and provide investors with assessments that take greater account of the economic and institutional realities of African countries.
According to the African Union, Africa’s annual external debt service rose from $61 billion in 2010 to $163 billion in 2024, reflecting the growing financial burden facing governments as they attempt to meet debt obligations while continuing to finance development.
In several countries, interest payments have also consumed resources that could otherwise have been directed towards sectors such as health and education, intensifying concerns about the sustainability of existing financing models.
The launch of AfCRA therefore represents more than the creation of another ratings institution. It forms part of a broader push by African governments and continental institutions to strengthen Africa’s financial architecture, improve access to capital and reduce information gaps that can influence how investors perceive risk across the continent.
“The stakes are significant. AfCRA complements existing global credit rating agencies by offering a perspective rooted in African data, expertise and realities.”
African Union
According to the African Union, the agency will operate independently and will be funded through shareholder capital and its own operations. Governments will not be permitted to own shares, a structure intended to protect the institution from direct political influence.
Its governance framework is designed to emphasise transparency, credibility and safeguards against conflicts of interest.
The institutional development of AfCRA has been overseen through the African Peer Review Mechanism, while the agency’s technical establishment has received support from Plus94, a South African research and intelligence firm specialising in credit ratings and market analytics.
The initiative can be traced back to 2018, when the African Union Assembly endorsed the creation of the agency. In July 2023, African finance and economic ministers adopted a declaration in Nairobi supporting the initiative, followed by further work on its governance structures, institutional framework and methodology during 2024 and 2025.
Its formal launch in October 2026 now places the institution at the centre of Africa’s continuing effort to strengthen its position within the global financial system.
Challenging the Cost of Capital in Africa
One of the most significant objectives behind AfCRA is to address the cost and availability of capital confronting African governments and businesses.
Credit ratings influence how investors evaluate borrowers and the level of risk associated with lending to them. A lower assessment can increase the cost of borrowing, while a stronger rating can potentially improve access to international capital markets.
AfCRA is expected to expand coverage across the continent, particularly for countries that have limited access to ratings from the three major global agencies.
According to the AU, only 32 of Africa’s 55 countries currently carry ratings from the Big Three, leaving 23 economies without such ratings.
AfCRA therefore intends to close part of this information gap by providing ratings for a broader range of African borrowers and institutions.
The agency’s mandate will not be restricted to governments. It will also assess financial institutions, corporations, and public and private entities, potentially creating a wider pool of information about African businesses and institutions seeking financing.
Its stated objective is to provide independent, evidence-based assessments while strengthening transparency and accountability in African financial markets.
The ambition is to create a financial information ecosystem in which African economies are not assessed exclusively through institutions headquartered outside the continent.
Yet the launch also raises questions about how AfCRA will establish itself in an international market where investors have long relied on established ratings agencies.
The credibility of any credit rating agency depends heavily on investor confidence in its methodology, independence and analytical standards. AfCRA will therefore face the challenge of convincing international markets that its assessments can be relied upon, whether the ratings are favourable or unfavourable to African borrowers.
Its independence will be particularly important given that the agency has emerged from a continental political initiative.
AU has emphasised that AfCRA will complement rather than replace existing global ratings agencies. The agency may also rate non-African entities where appropriate, indicating that its long-term mandate could extend beyond assessing African borrowers alone.
Its headquarters in Port Louis reflects Mauritius’ position as an established financial centre with international connectivity. The institution also plans regional subsidiaries to give it a broader presence across the continent.
The launch consequently forms part of a wider African effort to increase the continent’s influence over the institutions and mechanisms that shape its economic relationship with global markets.
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