When you apply for a loan, a lender wants to know whether you can repay. Governments face the same scrutiny when they borrow billions from investors. The difference is that instead of checking payslips and bank statements, investors rely on credit rating agencies to assess a country’s ability to repay its debts. Africa wants another agency doing the grading.

What happened? The Africa Credit Rating Agency (AfCRA) is in discussions with 15 African countries and expects to publish its first sovereign credit ratings by March 2027. The agency is backed by an African Union initiative and led by interim CEO Sifiso Falala. At launch, the AfCRA said its researchers were preparing to assess five countries first, including Togo, Kenya, Seychelles, Burundi, and Mauritius. 

Explain like I’m new here: The agency officially launched in Mauritius on October 7. When countries want to raise money through international bonds, investors need to know how risky the investment is. Three agencies have dominated this business, including S&P Global Ratings and Moody’s, both headquartered in the US, and Fitch Ratings, headquartered in New York and London. 

They assess a country’s economy, government finances, debt levels, and ability to repay, and their ratings influence how much interest investors demand. These agencies have been criticised for relying heavily on external data that do not always reflect local realities. The African Union (AU) endorsed the idea of creating AfCRA in 2018, and the African Peer Review Mechanism developed its institutional framework. It is finally moving towards operations. 

Why Africa wants another scorecard: According to the AU, 23 of its 55 member states have no sovereign rating from the three major international agencies. Countries such as Somalia, South Sudan, Sudan and Sierra Leone have been among those without ratings in recent assessments—making it harder to attract investors in international capital markets. 

Africa’s external debt-service payments also climbed from $61 billion in 2010 to $163 billion in 2024. AfCRA hopes better-informed assessments can help investors understand the continent’s risks and potentially improve access to financing.

There are other players, including Nigeria’s Agusto & Co, Côte d’Ivoire’s Bloomfield and South Africa’s Sovereign Africa Ratings, that already operate in this space. The difference is AfCRA’s proposed continent-wide sovereign rating mandate.

AfCRA wants to raise $15 million from African investors in exchange for a two-thirds stake. However, there is a credibility question. AfCRA plans to use an issuer-pays model, where governments pay to be rated, but it questions whether paying clients can influence government grades. 

It said independent committees and separation between commercial operations and rating decisions will protect its assessments. Its first ratings are expected by March 2027, probably drawn from the countries that agree to be assessed.