African credit rating agency to launch in September

Africa is moving toward greater financial autonomy with the establishment of the Africa Credit Rating Agency (AfCRA), backed by the African Union (AU) and supported by the African Peer Review Mechanism. Officials have confirmed the agency will begin operations by September 2025, offering assessments tailored to African economies, providing a more equitable alternative to Western-dominated firms like Fitch, Moody’s, and S&P

African governments have long criticised global agencies for perceived biases and opaque methodologies. With up to US$ $75 billion in excess borrowing costs attributed to these international ratings, AfCRA offers hope for fairer risk assessments. President William Ruto of Kenya and other leaders see its launch as crucial to reducing borrowing costs and attracting investment.

AfCRA will incorporate local economic data, infrastructure metrics, climate risks, and governance factors—creating a multi-dimensional rating framework grounded in African realities. However, success depends on maintaining credibility, being transparent, and gaining trust from global investors, many of whom still rely heavily on established Western agencies.

 

 

According to Finance in Africa, a number of African governments, municipalities, and private firms have already expressed interest in obtaining AfCRA ratings. The agency aims to be private-sector driven, independent of state control, but firmly anchored in African governance through institutional partnership with APRM and AU structures.

In the past, Namibian economists, including Josef Sheehama, have highlighted how traditional credit methods undervalue the country, raising borrowing costs. A UNDP analysis suggests Namibia could save N$2.1 billion annually, over N$10 billion across five years, if subjective rating biases are eliminated, the Namibian newspaper reported. FNB’s Helena Mboti also said there is a need for a credible, independent AfCRA that reflects Namibia’s fiscal discipline and ties to the African Continental Free Trade Area.