The African Credit Rating Agency, an initiative set up to provide an alternative to the so-called Big Three ratings agencies, will be launched by the end of September, according to the African Union.
It comes amid a deepening row over Fitch’s downgrading of the African Export-Import Bank (Afreximbank), which has reignited a debate about Western institutions’ influence over perceptions of risk around African lending that leads to steep capital costs.
Misheck Mutize, lead expert on credit-rating companies at an AU panel, told reporters a CEO would be appointed for AfCRA in the third quarter. The new agency will be based on the continent, whereas Fitch, Moody’s, and S&P Global Ratings are based in New York.
Afreximbank on Tuesday reacted to Fitch’s downgrade of its rating to BBB-, one step above junk, by saying it operates “very high standards of financial transparency,” and that the agency’s move was based on an “erroneous view” of the bank’s mandate. International finance experts told Semafor the downgrade threatened the lender’s ability to enter some funding markets and could seriously damage its credibility.
