The African Union (AU), on Wednesday, launched the Africa Credit Rating Agency (AfCRA) in Mauritius.
The move comes as leaders push for the continent’s financial
sovereignty and independent assessments of African economies.
Mahmoud Ali Youssouf, chairperson of the AU Commission, said
the agency would help address gaps in the assessment of African economies by
incorporating African data, expertise, and economic realities into credit
ratings.
He spoke on Wednesday at the official launch of the AfCRA in
St Louis, Mauritius.
Youssouf said credit ratings directly affect the cost and
availability of capital, adding that assessments that do not adequately reflect
African realities could result in higher borrowing costs for countries.
He said higher borrowing costs could constrain African
countries’ ability to finance infrastructure, health, education, energy, and
industrialisation, particularly as many nations face debt-servicing pressures.
“Africa is building a stronger and more resilient financial
architecture, with AfCRA set to become an important pillar,” Youssouf said.
“The agency will provide African and international
investors, as well as economic partners, with reliable, independent and
technically rigorous analysis of African economies and credit risk.
“Where assessments do not sufficiently reflect African data,
realities and context, countries can face higher borrowing costs, constraining
their ability to finance infrastructure, health, education, energy,
industrialisation and other development priorities.”
He said the agency is not intended to replace existing
international credit-rating agencies or guarantee favourable ratings for
African countries.
“Rather, it will provide an additional, independent and
Africa-focused perspective to the market,” he added.
The AU Commission chairperson said the credibility of AfCRA
would depend on its independence, professionalism, transparency and compliance
with internationally recognised standards.
He said the agency’s ratings must be evidence-based and free
from political considerations and conflicts of interest.
Youssouf also said African countries must continue to
strengthen macroeconomic management, fiscal responsibility, transparency, and
debt sustainability.
He said the establishment of the AfCRA aligns with the AU’s
Agenda 2063 and efforts to strengthen Africa’s financial architecture and
economic sovereignty.
Youssouf said the launch marks a step towards strengthening
Africa’s financial sovereignty and enabling the continent to play a greater
role in shaping the global economic and financial system.
He said the AfCRA would contribute by strengthening African
capacity, improving understanding of economic trends and providing objective
assessments of risks associated with African economies.
‘AGENCY COULD STRENGTHEN CAPITAL MARKETS’
Jyoti Jeetun, Mauritius’ minister of financial services and
economic planning, described the launch as a landmark for Mauritius and Africa.
Jeetun said AfCRA could help deepen African capital markets
and strengthen the continent’s capacity to mobilise capital for development.
Marie-Antoinette Rose Quatre, chief executive officer of the
African Peer Review Mechanism (APRM), said the AU endorsed the establishment of
AfCRA in 2017 and subsequently tasked the APRM with supporting the process of
establishing the agency.
Quatre said the APRM contributed to developing evidence on
limitations and biases in the assessment of African sovereign risk, as well as
AfCRA’s technical, operational and institutional framework.
She said credibility would be AfCRA’s greatest asset and
urged the agency to ensure that its ratings remain evidence-based, transparent,
technically rigorous, and independent.
Quatre also called on African governments and institutions
to provide accurate and timely information, while urging investors, financial
institutions and the media to scrutinise AfCRA’s work.
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