The African Union (AU) officially launched on October 7 the African Credit Rating Agency (AfCRA) in Saint-Louis, Mauritius, a project approved by the African Union as early as 2017. This initiative aims to strengthen the continent’s financial architecture and to provide a more in-depth and independent assessment of African economies and their credit risks.
The creation of AfCRA as a major step in the continent’s efforts to strengthen its economic and financial autonomy. This agency should enable African and international investors, as well as economic partners, to have reliable, independent, and technically rigorous analyses of African economies and credit risks.
The president of the AU Commission Mahmoud Ali Youssouf recalled that financial ratings directly influence access to financing conditions and the borrowing costs of States.
“When assessments do not adequately take into account local economic data and the realities specific to African countries, these countries may face higher financing costs.
Such a situation risks limiting their ability to finance essential sectors, including infrastructure, health, education, energy and industrialization, while several member states are already under significant debt service pressures,” reads a statement from the African Union.
A complementary alternative to international agencies
Mahmoud Ali Youssouf noted that AfCRA is not intended to replace existing international credit rating agencies.
Its objective is rather to provide an additional, independent perspective focused on African realities, by further integrating the continent’s data and expertise into evaluation processes.
He also stressed that this new institution should neither exempt borrowers from a rigorous examination of their financial situation, nor guarantee favorable ratings.
The credibility of AfCRA will rest essentially on its independence, professionalism, transparency and adherence to internationally recognized standards.
Its assessments must be based on verifiable data and free from political considerations or conflicts of interest.
“At the same time, African states must continue their efforts in macroeconomic management, budgetary discipline, transparency and debt sustainability,” declares Mahmoud Ali Youssouf.
From this perspective, AfCRA should contribute to strengthening African analytical capacities, a better understanding of economic trends and an objective assessment of the risks associated with the continent’s economies.
The president of the AU Commission stressed the need to respect international standards while ensuring better consideration of data, competencies and the particularities of African economies.
“With the official launch of AfCRA, the African Union is taking a new step in its strategy to strengthen the continent’s financial sovereignty, with the aim of giving more space to African expertise in the assessment of economic and financial risks,” the African Union stated.
