Africa’s $163 Billion Debt-Service Bill Sets the Stage for AU Ratings Agency

Africa’s annual bill for servicing external debt reached $163 billion in 2024, up from $61 billion in 2010, according to the African Union. In many countries, interest payments alone have overtaken yearly spending budgets for health and education. Against that backdrop, the AU is preparing to launch a credit rating agency intended to give investors another assessment of the continent’s borrowers.

The Africa Credit Rating Agency, or AfCRA, is scheduled to launch on Wednesday in Port Louis, Mauritius, where it will be based, according to Nation Africa Kenya (direct). The project has been in development for nearly a decade. African leaders endorsed its creation in 2018, backing an effort to offer an alternative perspective alongside the three major global ratings agencies.

A new voice in the borrowing debate

Credit ratings assess a borrower’s ability to repay debt. AfCRA will rate national governments, financial institutions and private companies, according to the AU. Its stated purpose is to bring African data and expertise into those assessments, while helping countries gain access to capital markets — the markets where governments and businesses raise funding. The AU presents the agency as a complement to existing global providers, rather than a replacement.

The agency will add a perspective grounded in African data, expertise and local conditions, the African Union said.

The launch follows years of complaints from African leaders about how the continent is assessed. They argue that Western ratings agencies judge lending risks unfairly and are too quick to cut ratings during conflicts, pandemics and other crises. The agencies dispute that account, saying their methods are applied consistently around the world. A Reuters investigation published in 2024 found no evidence of systemic bias in the sovereign ratings — assessments of national governments — assigned to Africa by the three leading agencies.

That disagreement sits alongside a more immediate financial challenge. Years of rising government borrowing have left some African countries in debt distress, or difficulty meeting debt obligations. The AU says AfCRA should help ease the burden through greater investor confidence and clearer market information. Those are the institution’s goals for the new agency; the launch itself does not establish that countries will secure better borrowing terms.

Coverage and independence in focus

The AU also points to a gap in coverage: 23 African economies have no rating from any of the three major agencies. AfCRA is expected to widen the pool of borrowers being assessed and offer investors more locally informed analysis. Its remit will not stop at the continent’s borders. The AU says it will also assess non-African entities where appropriate.

AfCRA will operate independently, with funding coming from shareholder capital and its own operations, according to the AU. However, the union has not identified the shareholders or provided further details about them. The funding structure and the promise of independence are central features of the model outlined ahead of the launch.

Wednesday’s launch now puts the focus on how that model will work in practice. The issues to watch are the agency’s coverage of unrated economies, further clarity on its shareholders and whether its assessments deliver the additional perspective the AU has promised. For governments facing heavy debt payments, the broader ambition remains better access to funding without losing sight of borrowing risks.