The institution will be backed by the African Union and will provide local-currency sovereign ratings, starting in 2026

Africa is preparing to launch its first homegrown credit rating agency by the end of September, Bloomberg reported on Monday.

The African Credit Rating Agency (AfCRA), supported by the African Union's African Peer Review Mechanism (APRM), plans to publish its first sovereign rating by late 2025 or early 2026. According to Misheck Mutize, the lead expert on credit-rating companies at the APRM, a shortlist for the chief executive position has been finalized, with an appointment anticipated in the third quarter.

The creation of AfCRA follows longstanding criticism from African governments regarding what they perceive as biased and non-transparent evaluations by the dominant global rating agencies, Fitch Ratings, Moody's Ratings, and S&P Global Ratings. Officials across the continent have accused the firms of systematically underestimating African economies, thereby increasing borrowing costs.

The APRM recently questioned Fitch's decision to downgrade Afreximbank, labeling the move as "flawed." Countries such as Ghana and Zambia, both of which have defaulted on their debt obligations in recent years, have emerged as outspoken critics of the current global ratings framework.

Despite its pan-African mission, AfCRA will not be a state-owned enterprise. Mutize clarified that this decision is intended to safeguard the agency's independence. Ownership will primarily lie with African private-sector stakeholders, although specific participants have yet to be disclosed. Mauritius-based MCB Capital Markets has been appointed as transaction adviser.

Initially, AfCRA will concentrate on providing local-currency credit ratings. Mutize, however, dismissed speculation that the agency is being set "to give favorable ratings to Africa."

The APRM was established in 2003 by the New Partnership for Africa's Development (NEPAD) and currently has 44 member-states. It is a voluntary self-monitoring tool for AU countries to assess governance performance and to ensure adherence to the union's values in political, economic, and corporate governance.

(RT.com)