Africa Launched Its Own Credit Rating Agency to Challenge the Three US Firms That Set Its Borrowing Costs

Africa now has its own credit rating agency. The Africa Credit Rating Agency, long planned under the African Union, launched in Mauritius on Wednesday, the continent's most concrete answer yet to years of complaints that the world's biggest raters overstate African risk and push up what governments pay to borrow.

AfCRA will rate governments, cities and companies. Officially it is meant to complement S&P, Moody's and Fitch, which together control 95% of the global ratings market. Unofficially, it is a challenge to them.

The numbers behind the grievance

Only three African sovereigns hold investment-grade ratings. Thirteen are rated very high risk or in default. And 23 have no rating from the big agencies at all, which effectively locks them out of international bond markets.

The bill keeps growing. The African Union says external debt service costs climbed from roughly $60 billion in 2010 to more than $160 billion in 2024. A 2023 UNDP estimate puts the cost of unfair ratings at $74.5 billion a year. Small moves matter: every 10 basis points shaved off a $1 billion Eurobond saves the issuer $1 million a year, and as France's recent bond sell-off that pushed euro debt spreads to 2012 crisis highs showed, perceived risk can move borrowing costs fast.

Marie-Antoinette Rose-Quatre, who heads the African Peer Review Mechanism, the AU body that incubated the agency, said it "will add another opinion in the market place of opinions" and called it "a very tangible outcome of our aspiration to build our own financial institutions." Nigerian President Bola Tinubu has argued that the Big Three misjudge African risk and that a homegrown agency could spot progress earlier.

A lot still unknown

The APRM describes AfCRA as privately owned and self-funded, but it has not named shareholders, a chief executive or a board. The agency "will require a licence" from Mauritius' financial regulator. Mauritius Commercial Bank and Afreximbank took part in a 2025 meeting to drum up support, and Afreximbank's public break with Fitch this year only sharpened the debate.

Skeptics are lining up. Daniel Cash, a UK law professor who has advised the APRM, said "Credibility in credit rating is accumulated rather than declared," and that the real test comes when AfCRA issues a rating a member state, "particularly an influential one," strongly dislikes. "Independence is demonstrated at the point of disagreement."

David Lubin of Chatham House asked whether the project amounts to Africa "marking its own homework," noting that fund managers compare African borrowers with the rest of the world and an African agency "does nothing" for them. Bright Simons of the Accra think tank IMANI wrote that "this is the bare minimum disclosure required before international investors can even begin to take AfCRA seriously."

Even AfCRA's chief architect, Misheck Mutize, has acknowledged that its main job may be steering Africa's $4 trillion in savings into African assets rather than changing how foreign investors see the continent.

The incumbents are moving in

The Big Three are not waiting. Moody's owns GCR, the largest issuer of ratings in Africa, and in July S&P agreed to buy a majority stake in Nigeria's Agusto & Co. S&P Global declined to comment, while Moody's and Fitch did not respond.

The launch lands amid a wider push by developing countries at the G20 and the UN to change how global finance prices their risk. South Africa used its 2025 G20 presidency to put borrowing costs on the agenda. AfCRA has not issued a single rating yet, and its first ones will decide whether anyone outside Africa listens.

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