Harsh Ratings Cost Africa $100 Billion In Credit Lines, AU Expert Says
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Afreximbank’s decision to end its credit-rating relationship with Fitch signals Africa’s push to reshape how credit risk is assessed for development, according to Dr Misheck Mutize, the African Union’s lead expert supporting countries on ratings agencies.
Mutize told BusinessDay that disagreements over methodology are central, saying Fitch’s approach has treated Afreximbank in a way he described as prejudicial and has not fully reflected the bank’s ownership by African sovereign member states or its multilateral character.
He said rating outcomes can raise borrowing costs and close off funding options, and he estimated Africa’s annual opportunity cost from unfavourable ratings and lost investment at more than $100 billion.
Mutize also said work on an alternative African credit rating agency is at a “very advanced” stage, with announcements expected after the February African Union summit.
South African Reserve Bank governor Lesetja Kganyago said reforming credit rating agencies was a key issue at the G20 Finance Track in 2025, citing past projections that overstated South Africa’s debt path compared with subsequent outcomes.
BusinessDay reported that Fitch downgraded Afreximbank to BB+ from BBB- with a stable outlook, cut the short-term rating to ‘B’ from ‘F3’, downgraded debt programme ratings and then withdrew the bank’s ratings, while the AU’s APRM warned that future Fitch ratings would be unsolicited and could misinform investors.
