African Export-Import Bank (Afreximbank) has lauded the launch of Africa Credit Rating Agency (AfCRA), describing it as an important milestone in strengthening Africa’s financial architecture and expanding the continent’s capacity to generate credible, independent analysis of African credit risk.

Accountability to Afreximbank, credit ratings play an important role in determining access to capital, influencing investor perceptions and shaping the cost at which governments, institutions and businesses can finance development.

“It is therefore essential that assessments of African credit risk are independent, rigorous and evidence-based, while reflecting a complete understanding of the structures, institutions and economic realities being assessed,” it stated.

It added: “The establishment of AfCRA adds an important African-led source of credit opinion to the market. Its value will not be measured by whether it produces more favourable ratings, but by the credibility of its analysis, the quality of its data and transparency of its methodology, and its ability to deepen understanding of African sovereigns, sub-sovereigns and corporate credit.

“This is particularly important given that many African issuers remain unrated, while local-currency and sub-sovereign markets continue to have limited rating coverage. Expanding credible rating coverage can improve the information available to investors and support the development of deeper domestic and regional capital markets,” Afrexim bank stated in a statement.

Commenting on the uniqueness of the African market, and the need for AfCRA’s rating methodology to reflect this, Senior Executive Vice President, Afreximbank, Denys Denya, said: “The rating methodology AfCRA develops must recognise the uniqueness of our environment and its institutional structures. The Agency must set its own standards and not follow those set elsewhere — it must build a unique identity that conforms to an ‘African best practice.”

Highlighting the need for the autonomy of the Africa Credit Rating agency, as it takes off, Denya said: “AfCRA must set a new benchmark for the continent, maintain its independence, and remain wholly owned and controlled by Africans. We must all use it, and in return expect a complete assessment of where we (Africa) stand: the strengths the market has ignored, and the weaknesses we still need to fix.”