The African Credit Rating Agency (AfCRA) is in negotiations with 15 African countries and expects to publish its first sovereign risk assessments by the end of March 2027, in an initiative designed to offer an alternative to the three dominant international credit rating agencies.

The information was provided by the institution’s interim executive director, Sifiso Falala, in an interview with Reuters. Falala said teams from the agency, which is headquartered in Mauritius, will conduct research visits across several countries, including Togo, Kenya, Seychelles, Burundi and Mauritius.

“We will be in a position to release the results by March, before the end of the month,” Falala said.

Established following an African Union initiative launched in 2018, AfCRA aims to provide an additional perspective on assessments of African countries’ capacity to meet their financial obligations.

The agency will conduct sovereign ratings upon request from governments, which will pay for the service and are expected to grant access to public officials and financial data. The institution also plans to assess African multilateral development banks, including Afreximbank, as well as private financial institutions.

The debate over credit ratings in Africa

African leaders have for several years voiced concerns over the conduct of the three main international rating agencies — S&P Global Ratings, Moody’s and Fitch — alleging that these firms overstate credit risks on the continent and downgrade countries too swiftly during periods of instability.

The agencies reject those accusations and maintain that they apply uniform methodologies globally. A Reuters investigation published in 2024 into Africa’s debt crisis found no evidence of systematic bias in the sovereign ratings assigned by the three institutions.

Lower credit ratings tend to raise financing costs, as they push up the interest rates demanded by investors and can restrict certain countries’ access to institutional investors.

“The cost of financing represents a very heavy burden for Africa,” Falala said, citing estimates that African economies pay more than US$75 billion per year in interest than comparable borrowers elsewhere.

The institution intends to raise US$15 million through a share sale, in an operation that is expected to allow African investors to hold two thirds of the capital.

Falala also noted that the continent’s total debt stands at approximately US$1.9 trillion. The African Union, meanwhile, estimates that annual external debt service costs have risen from US$61 billion in 2010 to US$163 billion in 2024.

Falala argued that the continent requires in-depth studies and assessments grounded in local data, adding that AfCRA intends to rely less on information provided by international financial institutions such as the International Monetary Fund (IMF).

The agency is privately owned and does not permit government participation in its capital. It is owned by Plus 94 Research, a South African research firm co-founded by Falala and Tirhani Mabunda.

The institution intends to raise US$15 million through a share sale, in an operation that is expected to allow African investors to hold two thirds of the capital. Falala added that AfCRA has completed the acquisition of a 51% stake in Sovereign Africa Ratings, a South African credit rating agency founded and led by Falala himself.