The African Union has launched the Africa Credit Rating Agency, AfCRA, in Mauritius as part of efforts to strengthen the continent’s financial independence and develop credit assessments that better reflect African economic realities.
The agency was officially launched on Wednesday in St Louis, Mauritius, with AU Commission Chairperson Mahmoud Ali Youssouf saying it would address gaps in the way African economies are assessed by incorporating local data, expertise and economic conditions into credit ratings.
Youssouf said credit ratings have a direct bearing on the cost and availability of capital, warning that assessments that fail to adequately account for conditions on the continent could contribute to higher borrowing costs for African countries.
He said expensive borrowing could limit governments’ ability to finance critical sectors including infrastructure, healthcare, education, energy and industrialisation.
The AU Commission chairperson noted that the issue was particularly important as several African countries grapple with growing debt-servicing obligations and limited access to affordable financing.
The launch of AfCRA therefore marks an attempt to provide an alternative African perspective in sovereign and corporate credit assessments, while strengthening the continent’s capacity to evaluate its own economies.
The AU says the agency is expected to draw on African data and expertise in producing credit assessments that reflect the specific economic circumstances of countries on the continent.
