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The Chairperson of the African Union Commission (AUC), Mahmoud Ali Youssouf, has cautioned that Africa’s newly launched credit rating agency will not significantly reduce borrowing costs for African countries in the near term, arguing that deeper reforms to the global financial system are needed to address the continent’s cost-of-capital challenges.
Youssouf made the remarks during the launch of the Africa Credit Rating Agency (AfCRA) in Port Louis, Mauritius, describing the initiative as a major milestone for Africa’s financial sovereignty while tempering expectations about its immediate impact on financing costs.
AfCRA, which was officially launched on October 7, 2026, is an African Union-mandated, independent and private sector-driven credit rating institution created to provide Africa-focused assessments of sovereigns, corporates, sub-sovereigns and other institutions.
AfCRA alone cannot lower borrowing costs
While welcoming the launch, Youssouf stressed that the agency should not be viewed as a quick solution to Africa’s longstanding financing challenges.
- “Let us not forget that the rating agency will certainly not reduce significantly the cost of capital in the near future.”
According to him, sustainable reductions in borrowing costs will require broader reforms to the global financial architecture and stronger advocacy from African governments and financial institutions.
- “Our member countries and our financial institutions bear a specific responsibility to advocate for those reforms.”
He also called for what he described as a more honest and equitable reform of global financial markets.
A milestone for Africa’s financial sovereignty
Despite the cautionary note, Youssouf described AfCRA’s launch as a landmark moment in Africa’s economic history.
- “This event is indeed a watershed moment in the economic history of our continent.”
According to him, the creation of AfCRA stems from a broader ambition to strengthen Africa’s financial independence and reduce reliance on external institutions for assessing the continent’s economic prospects.
He said the new agency should become a key instrument in advancing the African Union’s Agenda 2063 development blueprint.
Four key objectives
Youssouf outlined four strategic goals for the new rating agency:
- Strengthening Africa’s technical capacity and financial expertise.
- Enhancing understanding of the continent’s economic potential.
- Providing objective assessments of risks associated with African economies.
- Supporting financial institutions that shape capital market development across the continent.
The AU chief noted that better representation of African economic realities in credit assessments could help improve investor understanding of the continent’s opportunities and challenges.
Independence crucial to credibility
Youssouf emphasized that AfCRA’s success would depend largely on its ability to operate independently and maintain credibility with investors and market participants.
- “Yes, the Agency must be independent for the sake of its own credibility.”
He added that the institution has the potential to reshape global perceptions of African economies and attract greater investment flows into the continent.
- “AfCRA will not only change the perception of our economies, but it will also give a new impetus to investors looking for opportunities. And Africa is the land of opportunities.”
Why AfCRA was created
AfCRA was initially scheduled for launch in September 2025 and was conceived as an alternative African voice in a market dominated by Fitch Ratings, Moody’s Ratings and S&P Global Ratings.
The initiative emerged amid growing concerns among African governments and policymakers that international rating agencies often fail to adequately reflect the continent’s economic realities, leading to higher sovereign risk premiums and elevated borrowing costs.
Several African countries, including Ghana and Zambia, have previously argued that sovereign credit downgrades by global rating agencies contributed to rising debt-servicing costs and reduced access to international capital markets.
AfCRA is expected to provide independent, Africa-focused credit assessments using local expertise, regional data and methodologies tailored to African economic conditions.
