Elombi said the African Credit Rating Agency would offer fairer assessments of African risk.

Afreximbank President and Chairman of the Board of Directors Dr. George Elombi has thrown his weight behind Africa’s push for a homegrown alternative to the world’s three leading credit rating agencies, telling journalists in Abuja that African economies and institutions are unfairly penalised by international credit rating methodologies that overstate the continent’s risk and raise its cost of borrowing.

Responding to a question during Afreximbank’s mid-year media roundtable on the long-delayed effort to build an African ratings alternative to Moody’s, S&P Global and Fitch, Dr Elombi said the African Union’s decision to establish the initiative, now known as the Africa Credit Rating Agency, was overdue given that every other region of the world already has its own rating capacity.

He said, “Why should we not have one when other regions have one?”

The Push For An African Credit Rating Agency

The Africa Credit Rating Agency, or AfCRA, is being established under the mandate of the African Peer Review Mechanism, the African Union’s governance and accountability body, with its headquarters based in Mauritius. It is structured as a private sector led, independent entity rather than a state-owned body, a design intended to protect it from political interference and preserve its credibility with international investors. The agency was expected to begin operations around the middle of 2026, initially focusing on local currency debt ratings.

Dr Elombi said Afreximbank’s role would be limited to moral support rather than ownership or control, noting that the agency’s credibility depends on it being run independently by professional bankers and accountants with the same expertise used to assess corporate credit elsewhere. He said the technical skill required was not exceptional, comparing it to work seasoned bankers and auditors already perform routinely.

The African Peer Review Mechanism has already weighed in on the ratings debate this year, publicly questioning Fitch’s decision to downgrade Afreximbank to speculative grade in January, and describing the move as reflecting a misreading of how African financial institutions are governed. Afreximbank subsequently ended its relationship with Fitch altogether.

How The African Credit Rating Agency Could Change Africa’s Borrowing Costs

Dr Elombi argued that existing rating agencies apply a blanket discount to African assets regardless of actual default performance, describing a practice where analysts factor in the operating environment as a separate penalty even after an institution’s loan book, capital and management have each scored well individually. He said this final adjustment, sometimes reducing a rating by two or three notches, is applied inconsistently from year to year without clear justification.

He pointed to Afreximbank’s own experience as an example, arguing that despite carrying collateral on the vast majority of its loans and posting a strong record on defaults, the bank’s rating has repeatedly been marked down because of its African location rather than the underlying quality of its assets. Advocates of AfCRA make a similar broader argument, noting that only thirty two of Africa’s fifty four sovereign states currently carry a public credit rating from any of the three dominant global agencies, leaving much of the continent’s risk profile effectively unassessed by international standards.

Dr Elombi said a homegrown rating agency would be able to interpret African economic and governance data with context that foreign analysts often lack, comparing it to a local resident who can navigate a familiar environment without needing every detail explained. He said Afreximbank’s shareholders were not shaken by earlier uncertainty over its own rating status precisely because they understood the bank’s finances directly, without needing an external score to validate their confidence.

Not everyone views a continental ratings body as a straightforward fix. Independent analysts tracking AfCRA’s rollout have raised questions about how the agency will maintain analytical independence given its African ownership base, and whether international investors will trust its assessments enough to actually shift capital allocation decisions.

What This Means

If AfCRA gains traction with international investors, it could offer African governments and institutions a second opinion that better accounts for local context, potentially chipping away at the so called Africa risk premium that raises borrowing costs across the continent. But its success will depend on proving analytical independence to sceptical global markets, a test that will only be settled once the agency issues its first ratings and investors decide whether to act on them.