AU launches Africa’s first credit rating agency to reshape financing
QNADoha The African Union (AU) has launched the continent’s first credit rating agency, seeking to provide an alternative to the world’s three major rating agencies amid mounting d...
On August 10, the African Union (AU) inaugurated Africa's inaugural credit rating agency, the African Credit Rating Agency (AfCRA), in Mauritius. The AU aims to enhance financing in Africa by providing credit assessments rooted in African data and economic realities, as the continent currently lacks adequate credit coverage.
AfCRA, a privately-owned entity funded through its operations and capital contributions, seeks to offer an alternative to the three major global rating agencies amidst mounting African debt burdens. The agency, which has taken nearly a decade to establish, will deliver independent, evidence-based evaluations of sovereigns, companies, and institutions, while also assessing entities outside Africa as necessary.
Despite criticism that international agencies could be biased against Africa, they deny such allegations, stating that they uniformly apply their methodologies. African officials, however, argue that current models overlook critical factors like the informal economy and institutional resilience.
The AU emphasizes that AfCRA aims to bolster financial transparency, expand investor information, and facilitate smarter investments. Currently, only 32 out of Africa's 55 countries hold ratings from the three major international agencies, while 23 have none at all. Strengthening credit rating coverage would provide investors with more information about African economies, potentially improving access to capital.
Written by urgent.news from Qatar Tribune Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
