Africa To Launch Own Credit Rating Agency In June Amid Calls For Fairer Assessments

The new credit rating agency is part of the African Union’s push for fairer credit ratings that better reflect the continent’s economic realities.

In June, Africa will officially launch its own credit rating agency, the Africa Credit Rating Agency (AfCRA).

“It is time for Africa to use the right scale, one that reflects its true weight,” Kenyan President William Ruto said today at the presidential breakfast dialogue on the establishment in Ethiopian capital Addis Ababa.

The event brought together other African leaders, including Algeria’s President Abdelmadjid Tebboune, Ethiopia’s Taye Atske Selassie, and Zambia’s Hakainde Hichilema.

Currently, African nations rely on global rating agencies that critics say undervalue their economies, leading to higher borrowing costs.

AfCRA aims to address this by providing transparent, development-focused assessments.

A one-notch rating improvement could unlock $15.5 billion in additional funding — funds that could reduce reliance on aid and boost infrastructure, Ruto reportedly noted in statement.

Global credit rating agencies play a crucial role in determining how much it costs countries to borrow money from international markets.

However, African leaders and economic experts have long criticized these agencies for issuing ratings that they argue fail to reflect the true economic potential of African nations.

Critics claim that structural biases and outdated risk assessments result in lower-than-warranted ratings, making borrowing more expensive for African countries.

A study by the United Nations Development Programme (UNDP) found that African nations pay an estimated $75 billion more in interest payments than they would if they were rated more fairly.

Lower credit ratings mean African countries often face higher borrowing costs, limiting their ability to fund infrastructure projects, social services, and economic development.