--- title: "Investors will have the final say on Africa’s new credit rating agency" description: "AfCRA could reshape how African governments and businesses are assessed, widening ratings coverage on the continent and bringing local economic realities into risk analysis. But investors will have to be able to trust it." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "AFRICAN BUSINESS" author: "Bonface Orucho" author_url: "https://www.dailymaverick.co.za/author/bonface-orucho/" canonical_url: "https://www.dailymaverick.co.za/article/2026-11-05-investors-will-have-the-final-say-on-africas-new-credit-rating-agency/" published: "2026-11-05T16:32:14" lang: "en-ZA" word_count: 1049 --- # Investors will have the final say on Africa’s new credit rating agency > AfCRA could reshape how African governments and businesses are assessed, widening ratings coverage on the continent and bringing local economic realities into risk analysis. But investors will have to be able to trust it. By Bonface Orucho · Published 5 November 2026, 18:32 SAST ## Key points - Launched in Mauritius, it comes as African countries face soaring debt-service costs and unusually high borrowing rates. - Its localised analysis could challenge stereotypes and widen access to credit – but only if its data, methods and independence withstand scrutiny. - Ultimately, investors and African regulators will decide whether AfCRA becomes a market-shaping institution or merely another rating voice. ## Content Africa’s new credit rating agency could give investors a clearer view of the creditworthiness of African governments and businesses, widening access to credit assessments and potentially opening new financing opportunities for countries. However, according to experts, its impact will depend on whether investors trust its ratings and use them to guide their investment decisions. The Africa Credit Rating Agency (AfCRA) was launched in Port Louis, Mauritius, on 7 October. Developed under an AU initiative, it will assess governments, financial institutions, companies and other borrowers, complementing established agencies like Moody’s Ratings, S&P Global Ratings and Fitch Ratings. The initiative dates back to 2017, when the AU mandated the African Peer Review Mechanism to support member states in their dealings with credit rating agencies. After years of feasibility studies and institutional planning, Mauritius was selected to host the agency. The launch comes as African governments face rising debt-servicing costs and seek capital for infrastructure, energy and industrial development. According to the AU, external debt-service payments on the continent rose from $61-billion in 2010 to $163-billion in 2024. The Organisation for Economic Co-operation and Development’s Africa Capital Markets Report 2025found that lower-­middle-income African countries faced foreign-currency bond yields roughly one percentage point higher than comparable economies in other regions between 2022 and 2024. African dollar-denominated bond yields approached 9% in 2024, the highest among the regions covered. ![Logo](https://cdn.dailymaverick.co.za/i/Fi5SizmoOG-8jK1Ph7pKdtnrQVQ=/200x100/smart/filters:strip_exif\(\)/file/attachments/2999/P20-AfricaBird-credit2_393671.jpg) *The newly launched agency’s logo. (Image: Supplied)* Credit ratings help investors assess whether borrowers can repay their debts. They can influence borrowing costs and determine whether pension funds, insurers and other institutional investors are permitted to buy particular bonds. ### Localised knowledge AfCRA aims to bring more local knowledge and data into credit analysis, helping investors assess individual borrowers rather than relying on broad perceptions of continental risk. The potential costs of risk misperception are substantial. In a 2023 analysis, the UN Development Programme (UNDP) estimated that it cost African countries more than $24-billion in excess interest payments and more than $46-billion in forgone lending. In a separate estimate, the UNDP said African countries could save up to $74.5-billion if sovereign credit ratings were based on less subjective assessments. A 2024 study by Africa No Filter and Africa Practice estimated that stereotypical media narratives about Nigeria, Kenya, Egypt and South Africa cost the four countries a combined $4.2-billion annually in additional debt-servicing costs. The estimate concerned the effects of country perceptions and media portrayals, not costs caused by credit rating agencies alone. The studies highlight the financial consequences of how investors perceive risk. AfCRA’s challenge is to turn more detailed analysis into information that markets trust and use. Nomahlubi Jakuja, a South African economist, told Bird Story Agency in 2025 that the proposed rating agency would need to establish investor confidence to be effective. “It will have to establish credibility among investors to be effective,” Jakuja said, arguing that AfCRA must show investors why they should trust a new local institution alongside established agencies. ![Nomahlubi Jakuja. Photo: Supplied](https://cdn.dailymaverick.co.za/i/qnxjxISzrho3a1dFa3qJ8KmHqNA=/200x100/smart/filters:strip_exif\(\)/file/attachments/2999/P20-AfricaBird-credit1_158094.jpg) *Nomahlubi Jakuja. (Photo: Supplied)* Kenneth Ekesa, researcher and analyst at the African Economic and Social Research Institute, argued that existing methodologies could give insufficient weight to Africa’s informal economy, economic resilience and regional trade potential under the African Continental Free Trade Area (AfCFTA). “The issue has never been Africa’s actual economic performance, but rather the lens through which it is viewed,” Ekesa said. ### Beyond ownership African ownership alone will not make ratings more accurate. AfCRA must demonstrate that its data is reliable, its methods are trans­­parent and its assessments are independent, including when the findings are unfavourable. The AU says 32 of Africa’s 55 countries have ratings from the three major international agencies, leaving 23 without such assessments. AfCRA could widen coverage and provide investors with more information about borrowers that have limited access to credit analysis. Its early opportunity may lie in domestic capital markets. Pension funds, insurers and banks often operate under regulations that restrict which bonds they can hold, making recognition by na­­tional regulators im­­portant for any new rating agency. Mergers and acquisitions, corporate fi­­nance and asset management analyst Olu­­wakemi Owonubi Babalogbon says do­mestic markets could offer AfCRA an early route to relevance. She points to investment rules in Nigeria and regulatory requirements in Kenya and the West African Economic and Monetary Union as examples of how ratings can affect access to institutional capital. ![Oluwakemi Owonubi Babalogbon. Photo: LinkedIn](https://cdn.dailymaverick.co.za/i/KHjKmX-kfc9PBWDtQEqNOEly28Q=/200x100/smart/filters:strip_exif\(\)/file/attachments/2999/P20-AfricaBird-credit3_531041.jpg) *Oluwakemi Owonubi Babalogbon. (Photo: LinkedIn)* “In Nigeria, the rules are explicit,” Babalogbon said, referring to pension investment requirements that include ratings from qualifying agencies. AfCRA will need to meet relevant recognition requirements in each market where its ratings are intended for use. Regulatory approval makes a rating eligible for consideration, but investors must still trust it enough to act. If AfCRA earns that confidence, its assessments could help more companies, financial institutions and infrastructure borrowers to access domestic pools of long-term capital. George Lenaiyasa, a banking and finance professional, said the agency could give greater weight to regional trade, institutional reforms, informal economic activity and governments’ ability to manage local-currency debt. Such analysis could help investors distinguish between borrowers with different economic prospects and repayment capacities. This opportunity de­­pends on independence. AfCRA is intended to be driven by the private sector and self-funded, with governments barred from owning shares. The agency will have to show that its governance and funding arrangements ­protect its rating decisions from political pressure. At the launch, Jyoti Jeetun, Mauritius’ minister of financial services and economic planning, said the aim was not to secure more favourable ratings for African countries. “It is about helping the world understand Africa more accurately,” Jeetun said. ![Marie-Antoinette Rose-Quatre, CEO of the African Peer Review Mechanism. Photo: Thivhu Netshivhale/Wikimedia Commons](https://cdn.dailymaverick.co.za/i/wdhV8Gny0nbLKL4jJ4bIRvJQW7Q=/200x100/smart/filters:strip_exif\(\)/file/attachments/2999/P20-AfricaBird-credit5_628966.jpg) *Marie-Antoinette Rose-Quatre, CEO of the African Peer Review Mechanism. (Photo: Thivhu Netshivhale/Wikimedia Commons)* African Peer Review Mechanism Chief Executive Marie-Antoinette Rose-Quatre also stressed the need for independence. “Independence must not be a slogan used at launch; it must be the discipline by which this institution lives,” she said. UN Special Adviser on Africa Ahunna Eziakonwa said African financial institutions would need to use the agency’s ratings for it to gain wider acceptance. “We cannot ask global capital to trust what African capital treats as optional,” Eziakonwa said. – *Bird Story Agency/***DM** *This story first appeared in our weekly DM168 newspaper, available countrywide for R39. The e-edition of DM168 is now free for readers who are signed into their Daily Maverick account. Click*[***here***](https://www.dailymaverick.co.za/168/volume-07-issue-03/)*to access the e-edition.* ![Ballot box; Young people.  Image: Vecteezy; Photos: Supplied](https://cdn.dailymaverick.co.za/i/VZb2tVeqdB3VbiZAXSQcQa9hNgQ=/200x100/smart/filters:strip_exif\(\)/file/attachments/orphans/Naledi-Lunga-cover_312043.jpg)