BY EMMANUEL OLUKOTUN

A new Africa-led credit rating agency is set to begin operations by the end of September 2025, to offer an alternative to the global “big three” agencies, Fitch, Moody’s, and S&P.

The new institution, known as the African Credit Rating Agency (AfCRA), will make its first sovereign rating towards the end of year 2025 or beginning of 2026, said Misheck Mutize, Head of credit rating agencies at African Peer Review Mechanism (APRM), a subsidiary of the African Union.

Mutize disclosed that effort was in top gear to choose a Chief Executive officer from the names shortlisted to run the organization.

Dissatisfied with the ratings made by foreign agencies, some African nations had called for the formation of an African alternative which will make unbiased assessment of the African economy, thus the creation of AfCRA.

Countries like Zambia and Ghana, had publicly criticized the several downgrading of African credit ratings by foreign credit rating agencies, which according to them, has contributed to rising borrowing costs and eventual defaults.

In a recent example, the APRM challenged Fitch Ratings over its downgrade of the African Export-Import Bank (Afreximbank), accusing the firm of a flawed analysis and a poor understanding of African financial institutions.

Fitch, defending itself, said its procedures follow globally consistent and transparent criteria.

Mutize explained that to maintain AfCRA’s neutrality and independence from political influences, the agency will not be owned by African governments.

“This was designed to maintain independence and avoid conflict of interest. Shareholding will mainly be African private-sector driven entities,” he said.

AfCRA plans to focus primarily on local-currency debt ratings, which Mutize believes will play a critical role in strengthening Africa’s domestic capital markets and reducing over reliance on foreign currency-denominated debt.

He also stressed that AfCRA is not being set up to issue overly favorable ratings for African countries

“It is important to debunk the assumption that AfCRA is being established to give favorable ratings to Africa, no. We will issue downgrades where necessary,” Mutize said.