AFRICA’S long-standing frustration with how global financial institutions assess its economic risk is reaching a turning point, with the continent moving to strengthen its own credit rating capacity following a high-profile dispute between the African Export-Import Bank (Afreximbank) and global ratings agency Fitch.
The disagreement, which culminated in Afreximbank terminating its relationship with Fitch after the agency downgraded the bank’s credit rating to BB and later withdrew it, has sparked renewed debate about how African financial institutions are assessed and whether global methodologies fairly reflect the continent’s unique economic realities.
The fallout
The fallout between Afreximbank and Fitch was triggered by the ratings agency’s decision to downgrade the bank’s creditworthiness, citing sovereign risk exposure and broader operating environment concerns. Fitch’s decision, based on its global credit assessment framework, reflected concerns about the financial risk associated with lending to sovereign borrowers and operating within emerging markets.
However, Afreximbank strongly contested the downgrade, arguing that Fitch’s methodology did not adequately account for the bank’s developmental mandate, capital structure and shareholder support, which differ significantly from those of traditional commercial banks.
The dispute quickly escalated beyond a technical disagreement, prompting wider discussions among policymakers, economists, and financial regulators across Africa about the continent’s reliance on external rating agencies.
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Toward self-assessment
The Afreximbank episode has intensified calls for Africa to build stronger indigenous credit rating institutions capable of providing context-sensitive assessments of African economies and financial institutions.
Central to this shift is the African Credit Rating Association (ACRA), which is positioning itself as a continental platform to strengthen African-based rating agencies and provide alternative analytical perspectives in global capital markets.
ACRA president Dr Sifiso Falala says the dispute highlights systemic challenges within global credit rating systems rather than a single institutional disagreement.
“The recent developments underscore the urgent need for greater transparency, contextual sensitivity, and diversity in global credit rating practices,” Falala said in a statement responding to the dispute.
Why methodologies matter
Credit ratings play a critical role in determining how countries and institutions access international finance, influencing borrowing costs and investor confidence.
Falala emphasised that ratings should be understood as professional opinions based on specific methodologies rather than absolute indicators of financial strength. He warned that conventional rating frameworks often overlook the developmental impact and structural mandates of African financial institutions. Development finance institutions such as Afreximbank, he said, operate under mandates that extend beyond profit generation.
Their roles include facilitating trade, supporting economic integration, and financing infrastructure across the continent.
“These unique features demand analytical approaches that are context-sensitive and methodologies that are applied with transparency and consistency,” Falala said.
Despite severing ties with Fitch, Afreximbank continues to maintain ratings from other international agencies, including Moody’s, China Chengxin International Credit Rating Company, and Japan Credit Rating Agency.
According to Falala, this diversity of rating opinions provides investors with a more balanced understanding of the bank’s credit profile while highlighting the importance of pluralism within the global financial system.
He argues that the global credit rating ecosystem benefits from the inclusion of credible African-based rating agencies, which can offer deeper contextual understanding of regional economic structures.
Building Africa’s rating capacity
The emergence of ACRA reflects broader efforts by African governments and financial institutions to reduce reliance on external risk assessments that some policymakers believe inflate borrowing costs for African economies.
African leaders have long argued that global rating agencies sometimes apply methodologies that over-emphasise political and macroeconomic risks while undervaluing reform progress, institutional resilience, and development impact.
By strengthening African rating agencies, ACRA hopes to provide investors with more nuanced and locally-informed credit analysis, improve transparency in financial markets, and enhance Africa’s financial sovereignty.
Falala said ACRA aims to facilitate dialogue between issuers, investors, regulators, and rating agencies to ensure that credit assessments remain rigorous while reflecting African development realities.
ACRA is encouraging African institutions and investors to actively engage with regional rating agencies such as Sovereign Africa Ratings, Agusto & Co., ICRA Rating LLC, and Metropol.
Falala believes these agencies possess specialised expertise and institutional knowledge that can strengthen credit evaluation across African markets.
“By leveraging African rating agencies alongside global ones, the continent can build a more credible, transparent, and resilient financial ecosystem that reflects Africa’s true investment potential,” he said.
A turning point for African capital markets?
The Afreximbank-Fitch dispute is increasingly being viewed as a catalyst for Africa’s push to shape its own financial narrative.
As the continent seeks to attract investment to support infrastructure, trade, and industrialisation, the ability to present balanced and credible credit assessments is becoming critical.
For many African financial leaders, the message is clear: Africa is not rejecting global rating agencies but is seeking a seat at the table where its economic realities are better understood and fairly assessed.
The rise of institutions such as ACRA signals a strategic shift toward strengthening Africa’s voice in global capital markets — and redefining how the continent measures and communicates its own risk.