African union unveils credit rating agency amid debt concerns
The African Union (AU) is set to unveil the Africa Credit Rating Agency (AfCRA) in Port Louis, Mauritius, in a move aimed at providing an alternative to major global credit rating agencies and reducing Africa’s rising debt-servicing burden.
The agency, which has been in development for nearly a decade, is expected to provide independent assessments of the creditworthiness of African governments, businesses and financial institutions.
According to the AU on Wednesday, AfCRA will offer credit assessments based on African data, expertise and economic realities while complementing the work of existing global rating agencies.
The initiative is expected to provide an alternative to the three dominant global credit rating agencies Moody’s, S&P Global and Fitch which have faced criticism from some African leaders over their assessments of African economies.
The agencies, however, have rejected allegations of systematic bias, maintaining that their rating methodologies are applied globally.
An investigation in 2024 also found no evidence of systemic bias in the sovereign ratings assigned to African countries by the three agencies.
The AU stressed that the AfCRA would operate independently and be funded through shareholder capital and its operations, while governments would not be permitted to own shares in the agency under its framework.
“AfCRA aims to reduce such burdens by improving investor confidence and market transparency,” the AU added.
The initiative comes amid growing concerns over Africa’s debt burden, with the AU saying the continent’s annual external debt service rose sharply to $163 billion in 2024, from $61 billion in 2010.
In several African countries, debt-interest payments now exceed government spending on critical sectors, including health and education, further straining public finances and limiting governments’ capacity to fund development programmes.
The establishment of AfCRA is therefore expected to strengthen the continent’s financial markets, improve access to investment and provide what the AU describes as an African perspective on sovereign and corporate creditworthiness.