Africa Credit Rating Agency (AfCRA), a new ratings firm seeking to challenge the influence of global credit rating agencies on the continent, is in talks with 15 African governments and expects to publish its first sovereign assessments by the end of March 2027.
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The Mauritius-based agency, launched last month following an African Union initiative dating back to 2018, plans to begin research in countries including Togo, Kenya, Seychelles, Burundi and Mauritius, its interim chief executive, Sifiso Falala, told Reuters.
“We will be in a position, by March, before the end of March, to have released results,” Falala said in an interview.
AfCRA’s entry into the market comes amid longstanding concerns among African governments that the assessments issued by the world’s three largest credit rating agencies, S&P Global Ratings, Moody’s and Fitch Ratings, do not adequately reflect the continent’s economic conditions and can amplify borrowing pressures during periods of financial stress.
The three agencies have rejected accusations that their assessments are systematically biased against African countries, arguing that they apply the same methodologies across markets. A 2024 Reuters investigation into Africa’s debt crisis also found no evidence of systemic bias in their sovereign ratings.
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Nevertheless, the cost of borrowing remains a major concern for African governments, many of which face high debt-service obligations and limited access to affordable financing. Lower credit ratings can increase the yields investors demand on government bonds and restrict access to some institutional investors, making it more expensive for countries to raise funds.
“Cost of borrowing is really a huge burden to Africa,” Falala said, citing estimates that African economies pay an additional $75 billion annually in interest costs compared with borrowers elsewhere.
He put Africa’s total debt at about $1.9 trillion, while African Union estimates show that the continent’s annual external debt-service bill rose to $163 billion in 2024, from $61 billion in 2010.
Against this backdrop, AfCRA says it intends to provide an additional assessment of African creditworthiness, drawing more heavily on research conducted within the continent and relying less on data from international financial institutions such as the International Monetary Fund.
“What Africa needs is thorough research,” Falala said.
The agency plans to issue solicited sovereign ratings, a process in which governments pay for an assessment and provide access to officials and financial information. It also intends to assess African multilateral lenders, including the African Export-Import Bank (Afreximbank), as well as private financial institutions.
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Its approach will test whether a locally established ratings firm can build the credibility and investor confidence needed to influence how African borrowers are assessed. However, its ability to gain acceptance will depend not only on its understanding of local economies but also on the transparency, consistency and independence of its methodologies.
AfCRA is privately owned, with governments barred from holding shares. It is owned by Plus 94 Research, a South African research company co-founded by Falala and Tirhani Mabunda. The agency plans to raise $15 million through a share sale that would give African investors a two-thirds stake, Falala said.
It has also completed the acquisition of a 51 percent stake in Sovereign Africa Ratings, a South African credit rating firm founded and run by Falala.
The agency’s first assessments will be an early test of its ambition to provide an alternative perspective on African credit risk. But winning recognition among governments, lenders and international investors will require it to demonstrate that its ratings are rigorous, independent and trusted by the market.
Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.
