PORT LOUIS, Oct. 8– The launch ceremony of the Africa Credit Rating Agency (AfCRA), an African Union (AU)-mandated institution, was held on Wednesday in Balaclava, northern Mauritius.
Headquartered in Port Louis, the capital of Mauritius, AfCRA aims to strengthen how international financial markets assess and understand African sovereigns, sub-sovereigns, and businesses by improving data, expertise and context on African credit risk, helping enhance Africa’s voice in global financial governance.
The agency is a private sector-driven, self-funded independent entity founded under the oversight of the AU’s African Peer Review Mechanism. Governments cannot own shares in the agency, which is intended to ensure its independence from political influence, according to the AU.
AfCRA’s ratings will cover African sovereigns, sub-sovereigns, corporates, public and private institutions, and may also rate non-African entities, subject to management decisions.
At the ceremony, AU Commission Chairperson Mahmoud Ali Youssouf said that AfCRA aimed to provide African and international investors, as well as economic partners, with reliable studies and analysis of African economies.
He said that when risk assessments were driven by “political considerations,” the resulting high cost of capital could hinder investors and African countries from investing in infrastructure, health, education, energy and industrialization, further compounding the “significant debt service pressures” facing member countries.
According to the AU, Africa’s external debt service rose from 61 billion U.S. dollars in 2010 to 163 billion dollars in 2024, with interest payments exceeding public spending on health or education in most countries. Against this backdrop, the agency will seek to reduce such burdens by improving investor confidence and market transparency.
The AU figures also show that currently only 32 African states carry ratings from the three major international credit rating agencies, while the rest remain unrated. AfCRA will therefore expand coverage to open capital markets to more African issuers.
However, Youssouf said that AfCRA was not intended to replace existing international credit rating agencies, but to complement them by providing an “additional Africa-focused perspective.” (Namibia Daily News / Xinhua)
