AU launches Africa credit rating agency to strengthen continent’s financial sovereignty

The African Union (AU), on Wednesday, launched the Africa Credit Rating Agency (AfCRA) in Mauritius.

The move comes as leaders push for the continent’s financial sovereignty and independent assessments of African economies.

Mahmoud Ali Youssouf, chairperson of the AU Commission, said the agency would help address gaps in the assessment of African economies by incorporating African data, expertise, and economic realities into credit ratings.

He spoke on Wednesday at the official launch of the AfCRA in St Louis, Mauritius.

Youssouf said credit ratings directly affect the cost and availability of capital, adding that assessments that do not adequately reflect African realities could result in higher borrowing costs for countries.

He said higher borrowing costs could constrain African countries’ ability to finance infrastructure, health, education, energy, and industrialisation, particularly as many nations face debt-servicing pressures.

“Africa is building a stronger and more resilient financial architecture, with AfCRA set to become an important pillar,” Youssouf said.

“The agency will provide African and international investors, as well as economic partners, with reliable, independent and technically rigorous analysis of African economies and credit risk.

“Where assessments do not sufficiently reflect African data, realities and context, countries can face higher borrowing costs, constraining their ability to finance infrastructure, health, education, energy, industrialisation and other development priorities.”

He said the agency is not intended to replace existing international credit-rating agencies or guarantee favourable ratings for African countries.

“Rather, it will provide an additional, independent and Africa-focused perspective to the market,” he added.

The AU Commission chairperson said the credibility of AfCRA would depend on its independence, professionalism, transparency and compliance with internationally recognised standards.

He said the agency’s ratings must be evidence-based and free from political considerations and conflicts of interest.

Youssouf also said African countries must continue to strengthen macroeconomic management, fiscal responsibility, transparency, and debt sustainability.

He said the establishment of the AfCRA aligns with the AU’s Agenda 2063 and efforts to strengthen Africa’s financial architecture and economic sovereignty.

Youssouf said the launch marks a step towards strengthening Africa’s financial sovereignty and enabling the continent to play a greater role in shaping the global economic and financial system.

He said the AfCRA would contribute by strengthening African capacity, improving understanding of economic trends and providing objective assessments of risks associated with African economies.

‘AGENCY COULD STRENGTHEN CAPITAL MARKETS’

Jyoti Jeetun, Mauritius’ minister of financial services and economic planning, described the launch as a landmark for Mauritius and Africa.

Jeetun said AfCRA could help deepen African capital markets and strengthen the continent’s capacity to mobilise capital for development.

Marie-Antoinette Rose Quatre, chief executive officer of the African Peer Review Mechanism (APRM), said the AU endorsed the establishment of AfCRA in 2017 and subsequently tasked the APRM with supporting the process of establishing the agency.

Quatre said the APRM contributed to developing evidence on limitations and biases in the assessment of African sovereign risk, as well as AfCRA’s technical, operational and institutional framework.

She said credibility would be AfCRA’s greatest asset and urged the agency to ensure that its ratings remain evidence-based, transparent, technically rigorous, and independent.

Quatre also called on African governments and institutions to provide accurate and timely information, while urging investors, financial institutions and the media to scrutinise AfCRA’s work.