African Union launches Africa's first credit rating agency in Mauritius
In short
The African Union launched the African Credit Rating Agency (AfCRA) on October 7 in Port Louis, Mauritius, where the agency is headquartered. China News Service described it as Africa's first credit rating agency. African Union Commission Chairperson Youssouf called its creation a watershed in African economic history and a step toward strengthening Africa's financial sovereignty.
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The African Union launched the African Credit Rating Agency (AfCRA) at a ceremony on October 7 in Port Louis, the capital of Mauritius, according to China News Service and CLS. China News Service, reporting from Johannesburg, described it as Africa's first credit rating agency. CLS reported that the agency was set up under a mandate from the African Union and is headquartered in Port Louis. Yicai also reported the agency's formal establishment in Mauritius. [ 1 , 2 , 3 ]
Speaking at the launch, African Union Commission Chairperson Youssouf called the agency's creation "a watershed in Africa's economic history" and an important step in strengthening Africa's financial sovereignty, China News Service reported. He said the agency was not created to seek more favourable ratings, but to ensure that ratings are credible and independent and take full account of Africa's specific circumstances, which he said would help build a more balanced global financial architecture. [ 1 ]
Youssouf said international market perceptions of "African risk" directly affect Africa's cost of capital and its ability to raise resources for development. For that reason, he said, African institutions have a responsibility to protect the interests of African economies and to help address structural problems in global financial markets. [ 1 ]
According to CLS, the agency aims to supply better African credit risk data, expertise and background information, so that international financial markets can understand and assess African sovereign states, sub-sovereign entities and companies more accurately, and to strengthen Africa's voice in global financial governance. [ 3 ]
Why it matters
According to Youssouf, international market perceptions of "African risk" directly affect Africa's cost of capital and its ability to raise resources for development. CLS reported that the agency aims to help international financial markets assess African sovereigns, sub-sovereign entities and companies more accurately, and to give Africa a stronger voice in global financial governance.
Key facts
- The African Union launched the African Credit Rating Agency (AfCRA) on October 7 in Port Louis, the capital of Mauritius. [ 1 , 3 ]
- China News Service described AfCRA as Africa's first credit rating agency. [ 1 ]
- The agency was set up under a mandate from the African Union and is headquartered in Port Louis. [ 3 ]
- African Union Commission Chairperson Youssouf called the agency's creation a watershed in African economic history. [ 1 ]
- Youssouf said the agency is not meant to secure more favourable ratings but to ensure ratings are credible, independent and take full account of African conditions. [ 1 ]
- The agency aims to provide better data, expertise and context on African credit risk for sovereigns, sub-sovereign entities and companies, CLS reported. [ 3 ]
Confirmed by several sources
Still unclear
- When AfCRA will issue its first ratings and which countries or entities it will rate first. None of the documents gives a timetable or a list of first ratings.
- How the agency is funded and staffed. The documents do not say.