Africa’s first credit rating agency set to launch

Mauritius will launch Africa's first credit rating agency, known as the Africa Credit Rating Agency (AfCRA), on Wednesday. This marks a significant step in addressing years of complaints that global agencies overstate African risk, driving up borrowing costs for the continent. AfCRA will rate governments, cities, and companies and is designed to complement the three US firms that currently control 95% of the global ratings market.

Only three African sovereigns have investment-grade ratings, while 13 are rated as very high risk or in default, and 23 have no rating from the big agencies, preventing them from accessing international bond markets. The AU has also revealed that the continent's external debt service costs have increased from around $60 billion in 2010 to over $160 billion in 2024.

The launch of AfCRA is part of a broader effort by developing countries, including the G20 and the UN, to change how global finance prices their risk. The agency's creators claim that unfair ratings cost Africa $74.5 billion annually. However, details about AfCRA's ownership, leadership, and licensing remain unclear. Mauritius Commercial Bank and Afreximbank participated in a 2025 meeting to support the project, and the agency is expected to require a license from Mauritius' financial regulator.

Critics argue that investors may not trust AfCRA, as it is created by the governments it rates. Some question whether investors will view an African agency as an impartial alternative to the current global firms. Nevertheless, supporters believe that AfCRA will provide a crucial platform for Africa to shape its own financial narrative and access international markets more effectively.