Can a New Credit Rating Agency Help Africans Borrow at Better Rates?

October 8, 2026

African countries continue to push back against Western institutions that they believe fail to meet their needs. In a move that follows other efforts to gain greater self-sufficiency on the global stage, the African Union (AU) launched its new credit rating agency (CRA) on Oct. 7.

The Africa Credit Rating Agency (AfCRA) hopes to rectify an issue about which many Africans have long complained—that the current credit rating landscape overemphasizes risk across the continent, leading to excessively expensive borrowing costs for African states and institutions. Although experts have widely differing views on the likely efficacy of the AfCRA, the AU is pushing full steam ahead with this new agency.

The vast majority of credit ratings are determined by the Western-based “big three” CRAs—Moody’s, Standard & Poor’s (S&P), and Fitch. Together, these companies’ ratings shape borrowing costs for more than 95 percent of the world’s rated debt, encompassing sovereign actors, multilateral institutions, and private corporations.

The big three CRAs began providing credit ratings to African sovereigns in 1994, when South Africa received the continent’s first credit rating. In 2003, the role of CRAs in Africa expanded substantially when the United Nations Development Program (UNDP) partnered with S&P to offer credit ratings to 13 African countries. At the time, many experts believed that the introduction of the Western big three CRAs in Africa would help improve the continent’s financial credibility for major global financial players, which would help attract capital, even though there was also concern that poor ratings and weak governance would increase the continent’s debt burden.

Full piece in Foreign Policy