Who gets to decide Africa's risk? A new rating agency enters the arena

By Michael Denenga, partner, and Sabelo Ndlovu, associate at Webber Wentzel

For as long as African states have borrowed on international markets, a handful of analysts sitting thousands of kilometres away have had an outsized say in what that money costs. With the official launch of the Africa Credit Rating Agency (AfCRA) in Mauritius on 7 October 2026, the African Union (AU) has gone beyond claiming a seat at the proverbial table and has instead built its own table.

Why now?

African leaders have long accused the "big three" ratings agencies – Moody's, Fitch and S&P – of overstating African risk and downgrading too quickly during a crisis, although a 2024 Reuters investigation found no evidence of systemic bias in their sovereign ratings for the region. What is not in dispute is the bill: the continent's annual external debt service climbed from USD 61 billion in 2010 to USD 163 billion in 2024, with interest payments in some countries now exceeding national health and education budgets. The UN Development Programme has also quantified the opportunity cost, estimating that fairer rating methodologies could unlock savings of up to USD 5 billion a year, or as much as USD 75 billion for African borrowers over time. These numbers may not directly substantiate the longstanding grievance, but they certainly lend support to the case for exploring alternative mechanisms and models for measuring African creditworthiness.

A familiar thread for our readers

In our Confluence Revolution series on private credit in Africa, we charted how the continent's credit markets are being reshaped by the same forces now converging on AfCRA's launch: African private debt deal values grew 14% year-on-year even as other asset classes declined, and local institutional investors are increasingly looking to plug a lending gap that traditional banks, constrained by capital requirements, are unable to fill. AfCRA is best understood as the sovereign-level counterpart to that story – another sign that African capital and debt markets are maturing and demanding institutions built for African conditions, rather than retrofitted from elsewhere.

This development also reinforces a recurring proposition: Africa does not simply need more capital; it needs stronger financial institutions and credible mechanisms to channel its substantial domestic savings into productive investment. Private credit funds are emerging as one such channel, connecting institutional investors with businesses and infrastructure projects underserved by traditional lenders. AfCRA could become another important part of that ecosystem by improving credit information, strengthening risk assessment and helping investors distinguish between perceived and actual credit risk.

What clients stand to gain

AfCRA will rate sovereigns, financial institutions and private companies. It is positioned as a complement to rather than a rival of the incumbent agencies, with the AU noting that 23 African economies currently have no rating from the big three. For our clients, that gap presents an opportunity: a new, Africa-grounded benchmark for pricing bonds and loans, a fresh comparator in acquisition and project financing, and ratings coverage for borrowers who have simply never made it onto the scoreboard before.

The trust problem

Here is the uncomfortable truth that commentators keep returning to: a rating agency is only as useful as the trust investors place in it and trust is precisely what AfCRA does not yet have. "The first hurdle will be inevitably credibility, because a new rating agency begins with a promise while investors ultimately require a track record," Dennis Shen of the International School of Management in Berlin told Bloomberg. Economist Daouda Sembène has made the same point more bluntly: for AfCRA to matter, it must be independent of the AU and its member states; it cannot merely be African in name. . At the Financial Times Africa Summit in London held on 21 and 22 October 2026, Angola's Minister of State for Economic Coordination, José de Lima Massano, put the grievance in human terms: a country that keeps honouring its debts while still paying a premium for the privilege – the exact disconnect AfCRA was built to close.

Why Mauritius matters to us

Mauritius was chosen as AfCRA's home, no doubt because of its well-established and credible financial markets and related infrastructure. The 7 October ceremony in Port Louis was the AU's public inauguration of the institution, not its opening for business: AfCRA still has to be registered and licensed by the Mauritius Financial Services Commission, finalise its as-yet-unannounced corporate structure and issue its first rating before it can operate as a going concern. Mauritius is a jurisdiction whose inner workings we know well through our direct work on transactions and enduring collaboration with our alliance partner in the country. This will give us a front-row seat and backstage pass to the genesis of a continental financial institution.

AfCRA will not move the price of a single bond tomorrow. Its significance may ultimately lie in something broader: helping to build the financial infrastructure through which African risk is better understood, capital is more confidently deployed and African savings are channelled into productive investment. Alongside the growth of private credit, deeper local capital markets and stronger institutional investment frameworks, AfCRA represents another step towards a continent that does not merely attract capital from elsewhere but increasingly mobilises, deploys and recycles its own. Its success will depend on whether it earns the confidence of the investors whose capital decisions it seeks to influence. Discussions at the Africa Summit strongly suggested a growing determination across the continent to play a role in shaping how African economies are assessed and how investment risk is understood.

Founded in 1868, Webber Wentzel is a leading full-service law firm providing clients with innovative solutions to their most complex legal and tax issues across Sub-Saharan Africa. With over 450 lawyers, their multi-disciplinary expertise is consistently ranked top tier in leading directories and awards, both in South Africa and on the African continent. Their collaborative alliance with Linklaters and their deep relationships with outstanding law firms across Africa provide clients with market-leading support wherever they do business.