Onome Amuge
The African Export-Import Bank’s (Afreximbank) recent decision to sever ties with Fitch Ratings marks a significant moment in Africa’s ongoing effort to assert control over its financial architecture and challenge the prevailing norms of global credit assessment. The move reflects deepening frustration among African institutions over methodologies that they argue systematically undervalue the continent’s sovereign-backed multilateral institutions.
Afreximbank, a pan-African development bank owned by 54 sovereign member states, announced last week that it had terminated its credit rating agreement with Fitch following the agency’s downgrade of the lender to BB+ from BBB-, with a stable outlook. Fitch also lowered Afreximbank’s short-term rating to ‘B’ from ‘F3’, citing a revised assessment of the bank’s policy importance risk following Ghana’s debt restructuring. Fitch subsequently withdrew its ratings entirely.
From the perspective of African regulators and Afreximbank, the debate is less about an individual rating decision and more about the systemic gap between international rating practices and the realities of development finance on the continent.
“Afreximbank makes a strong statement to ratings agencies that they need to reconfigure their approach. They are not flexible about methodology… they classify Afreximbank as a baby multilateral institution. That is a very prejudicial description for a multilateral institution already,” said Misheck Mutize, lead expert for country support on ratings agencies at the African Union.
According to Mutize, Fitch and other agencies fail to account for the bank’s ownership structure and preferred creditor status. In practical terms, this creates scenarios in which countries like Ghana would technically be considered in default on loans owed to an institution they themselves own. “The bank has much stronger preferred creditor status than the IMF or World Bank, which enjoy that status as a matter of practice,” he said.
Mutize estimates that African economies and investors lose upwards of $100 billion annually in opportunity costs due to overly conservative or misaligned ratings. These costs manifest in higher borrowing rates, restricted access to funding options, and hesitancy from international investors. “Countries are paying an unnecessary interest rate, and sometimes they cannot pursue certain funding options because of the risk perception,” he said.
The African Union is reportedly moving forward with plans to establish an alternative ratings agency, designed to provide assessments aligned with the operational and sovereign context of African institutions. The initiative is said to be at an advanced stage, with formal announcements expected after the AU summit in February. Advocates argue that such an agency would provide greater clarity for private investors and help unlock capital for the continent, particularly in infrastructure, trade, and development financing.
“This is not an attack on the global financial system. But if agencies can adjust their methodology for China or Mexico, why not for Africa? The data should reflect relevant local realities to guide investors accurately,” Mutize emphasised.
The controversy is symptomatic of tensions between emerging economies and the dominant global financial architecture. Lesetja Kganyago, governor of the South African Reserve Bank, highlighted similar issues during the 2025 G20 Finance Track, pointing to prior South African downgrades in 2017 and 2020. He noted that agency projections overestimated debt-to-GDP ratios, predicting 94–100 per cent, while the actual ratio is around 76 per cent. “They were wrong. You need to be able to engage with them on that basis,” he said.
The African Peer Review Mechanism (APRM), a continent-wide governance body, supported Afreximbank’s decision, arguing that Fitch’s rating exercise showcased a limited understanding of the bank’s mandate, mission, and foundational agreements. “An issuer is fully within its rights to discontinue the rating relationship, and any future ratings issued by Fitch would be unsolicited and nonparticipatory, risking misinforming investors,” the APRM said.
