The Pan-African development bank said Fitch’s rating framework no longer aligns with its establishment treaty, mission, or mandate—raising broader questions about how international rating firms assess African institutions.
A Rift Over Ratings and Representation
Afreximbank explained that the decision came after a review of the relationship and concluded that Fitch’s approach does not adequately reflect the bank’s legal protections or operational realities.
“Afreximbank has today officially terminated its credit rating relationship with Fitch Ratings,” the bank said in its statement. “This decision follows a review of the relationship, and its firm belief that the credit rating exercise no longer reflects a good understanding of the Bank’s Establishment Agreement, its mission and its mandate.”
At the time of publication, Fitch had not issued a response.
However, sources familiar with the matter told reporters that Fitch’s downgrade had increased Afreximbank’s borrowing costs in international markets, raising interest rates and complicating access to affordable capital. Afreximbank argues that Fitch’s current rating model mischaracterises its financial structure and treaty-based protections.
The Downward Turn: June 2025
The dispute dates back to Fitch’s June 2025 decision to downgrade Afreximbank’s long-term credit rating from BBB to BBB-, with a negative outlook. Fitch cited concerns over the bank’s sovereign loan exposure and asset quality, particularly as several African governments entered debt restructuring processes.
Fitch pointed to rising exposure to sovereign borrowers such as Ghana, South Sudan, and Zambia—countries facing or undergoing debt restructuring. The agency also questioned Afreximbank’s non-performing loan (NPL) metrics and transparency.
Fitch estimated NPLs at 7.1%, while Afreximbank reported 2.3%. Fitch also raised concerns over the bank’s application of IFRS 9 accounting standards and suggested that participation in sovereign restructurings could weaken Afreximbank’s preferred creditor status—an important factor in evaluating multilateral banks.
Afreximbank strongly denied the claims. It rejected any involvement in sovereign restructurings, citing its treaty protections, and defended its financial reporting as IFRS 9-compliant and supported by external audits.
A Broader Debate Over African Credit Ratings
The dispute has taken place against a backdrop of growing criticism from African institutions over global rating methodologies.
In late 2025, the African Credit Rating Agency (AfCRA), backed by the African Union, announced plans to begin issuing ratings by late 2025 or early 2026. The agency aims to provide an African alternative to established firms such as Fitch, Moody’s, and S&P.
In June 2025, Afreximbank’s Group Chief Economist, Dr. Yemi Kale, argued that international rating agencies use “one-size-fits-all” models that fail to account for the structure, risks, and policy frameworks of African economies. He said this bias increases borrowing costs even as macroeconomic indicators improve.
An Unusual Move in Global Markets
Afreximbank’s termination of its relationship with Fitch is rare. Most rating changes occur quietly or are initiated by the rating agency. A public, issuer-led split following a downgrade is almost unheard of.
The decision also underscores how global markets are increasingly treating African multilateral institutions like commercial lenders, rather than policy-driven entities with treaty-based protections.
Despite ending the relationship with Fitch, Afreximbank remains financially significant and strategically important. Yet the fallout from Fitch’s downgrade continues to shape investor sentiment and bond pricing.
With Fitch no longer providing ratings, greater emphasis will now fall on Moody’s and S&P, increasing scrutiny of Afreximbank’s sovereign exposure, asset quality, and reporting standards. The episode may have narrowed the bank’s margin for error in global capital markets—even as it seeks to defend its credibility and independence.