Ruto eyes Nairobi role in Africa’s new credit rating agency

Nairobi, Kenya - President William Ruto announced on October 12 plans for Kenya to become a sovereign client of the Africa Credit Rating Agency (AfCRA), the continent's newly established credit rating institution. The announcement came after a congratulatory message from Ruto following AfCRA's launch in Port Louis, Mauritius. Kenya aims to explore hosting a secondary jurisdiction of AfCRA in Nairobi as part of its broader efforts to enhance Africa's financial sovereignty and have a greater say in assessing the continent's economies.

The agency, launched on October 7 under an African Union-backed initiative, aims to provide independent, evidence-based assessments of African governments, businesses, and institutions, complementing rather than replacing existing global rating agencies. The AU Commission Chairperson, Mahmoud Ali Youssouf, stated that AfCRA would address information and analysis gaps by incorporating African data, expertise, and economic conditions into credit assessments.

African countries are under pressure to manage mounting external debt, with Africa's external debt service reaching US$163 billion in 2024, up from US$61 billion in 2010. AfCRA's ratings are expected to help lower borrowing costs for African countries by providing assessments that better capture the continent's economic conditions and development potential.

However, the agency's credibility and influence will depend on transparent methodologies, technical rigor, and independence, as well as gaining the acceptance of investors and financial institutions.