The African Union has launched the Africa Credit Rating Agency (AfCRA) in Port Louis, Mauritius, marking a significant step in efforts to strengthen Africa’s capital markets and expand credit rating coverage across the continent.
The agency follows years of lobbying by African governments and policymakers, who say the dominance of the “big three” credit rating agencies — Moody’s, S&P Global and Fitch Ratings — has contributed to an unjustified “Africa premium”, increasing borrowing costs for some African countries.
Key developments:
- AfCRA received a financial services licence in Mauritius before its official launch.
- The African Union says the agency will operate without government ownership and is expected to focus primarily on local currency sovereign and corporate debt.
- The African Union estimates that less than a quarter of Africa’s estimated US$4 trillion capital base is currently covered by credit ratings.
Misheck Mutize, AfCRA’s lead expert on credit ratings, said the agency aims to deepen Africa’s capital markets and support investment in infrastructure, energy and manufacturing. Moody’s said it welcomed initiatives that support the continued development of Africa’s capital markets and understanding of credit risk across the continent.
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