The African Export-Import Bank (Afreximbank) has strongly contested Fitch Ratings’ decision to shift its institutional outlook to negative, maintaining that the bank’s fundamentals remain sound and that its treaty-based structure provides protection against identified concerns.
On Tuesday, Afreximbank issued a response emphasising its adherence to International Financial Reporting Standards, particularly IFRS 9 requirements for loan classification protocols. The institution highlighted that these methodologies are transparently documented in its audited 2024 financial reports.
Fitch’s 4 June assessment expressed apprehension about the potential restructuring of sovereign debt owed by certain African nations to the bank, leading to the outlook adjustment. The rating agency also noted divergent approaches to defining non-performing loans (NPLs), with Afreximbank employing “forward-looking information” in its assessments.
The bank firmly dismissed any suggestion of participation in debt restructuring arrangements, stating: “To do so would be inconsistent with the Bank’s establishment treaty.” The institution emphasised: “The treatment of its loans and other activities is governed by the treaty and not by classifications created outside its framework.”
Established under a multilateral agreement among 53 African nations, Afreximbank contends that this treaty foundation creates legally binding safeguards and constrains exposure to unilateral modifications in borrower arrangements.
While maintaining the negative outlook, Fitch recognised several institutional strengths, noting the bank’s “strong equity to assets and guarantees ratio” and “excellent internal capital generation.” The agency also commended the “strong quality” of treasury holdings.
Afreximbank views these acknowledgements as validation of its risk oversight capabilities and operational durability. The institution reiterated its dedication to assisting member nations during challenging economic periods while advancing continental trade, development initiatives, and macroeconomic equilibrium.
Separately, the African Union has established the African Credit Rating Agency (AfCRA), scheduled to commence operations by the end of September 2025. This initiative represents an effort to provide alternatives to established international rating firms—Fitch, Moody’s, and S&P.
AfCRA plans to issue its inaugural sovereign assessment by late 2025 or early 2026, according to Misheck Mutize, who serves as lead expert on credit rating agencies within the African Peer Review Mechanism (APRM), an African Union subsidiary.
The agency is currently finalising its CEO selection, with candidates shortlisted and an appointment anticipated during the third quarter.
The African Peer Review Mechanism has criticised Fitch’s Afreximbank downgrade, characterising the analysis as fundamentally flawed and reflecting insufficient comprehension of African financial sector dynamics.
