First continental African credit rating agency to launch in October

The African Credit Rating Agency (AfCRA) will begin operations in Mauritius on October 6. The private sector-led institution will provide sovereign and corporate credit ratings without any government shareholding. “It means a new dimension has come. We are seeing more confidence in Africa because the investors backing this initiative are from the private sector,” said Misheck Mutize, lead expert at the African Peer Review Mechanism.

The launch represents a direct challenge to the dominance of S&P Global and Moody’s in assessing African debt. For years, African policymakers have argued that international agencies overstate the continent's risks, inflating borrowing costs and restricting access to international capital. A 2023 United Nations Development Programme report estimated these rating inefficiencies cost African economies roughly $75 billion annually.

Global agencies are simultaneously moving to acquire the local expertise they previously lacked. S&P Global announced on Tuesday it is buying Nigeria’s Agusto & Co., which operates across Nigeria, Kenya, Rwanda and Ghana. Moody’s has already expanded its footprint by acquiring GCR Ratings, West Africa Rating Agency and Egypt’s Middle East Ratings and Investors Service.

Mutize said this consolidation validates the arguments made by African institutions. “We seem to be vindicated that we were raising legitimate concerns,” he said. He noted that African bodies have backed their criticism of sovereign ratings with empirical research.

AfCRA’s founders are positioning the agency as a more accurate alternative, rather than an advocacy tool. “The objective is not to inflate ratings,” Mutize said. “It is to ensure ratings are informed by a deeper understanding of domestic political, economic and institutional realities.”

The push for a homegrown agency has strong political backing. In February, Nigerian President Bola Tinubu argued in the Financial Times that global firms place excessive weight on subjective institutional risks while maintaining limited operational presence in Africa. He highlighted that only three African nations currently hold investment-grade ratings, despite the IMF projecting the continent as the world’s fastest-growing region.

Market participants will watch closely to see if investors accept AfCRA’s assessments. Sovereign credit ratings directly dictate Eurobond pricing and capital market access. If successful, the agency could become a central pillar of Africa’s financial architecture, supporting the development of domestic debt markets.