By: Nghiinomenwa-vali Hangala
An analysis of rating actions and commentaries issued by international credit rating agencies (CRAs) on African countries has revealed that they have refused to invest in-country analysts through physical presence in Africa.
According to the African Peer Review Mechanism (APRM) 2025 Mid-Year Outlook report, the three dominant international Credit Rating agencies have consistently resisted calls to reform their Africa-facing operations.
The top 3 global credit rating agencies are Standard & Poor’s (S&P) Global Ratings, Moody’s Investors Service, and Fitch Ratings, with headquarters in New York.
The APRM researchers stated that despite repeated appeals from African governments, development institutions, and civil society, they have refused to both increase the number of in-continent analysts or establish meaningful physical presence in Africa.
“They underplay requests to expand the scope of engagements to include key domestic institutions, regional development banks and civil society stakeholders, which undermines the credibility, contextual accuracy and developmental alignment of their ratings for African countries,” the APRM team wrote in their report.
The researchers revealed that rating agencies from the continent come as a result of it being viewed as a small market, which fails to correlate with business sense. However, S&P Global Ratings, which is the only agency covering the continent while maintaining sizable operations in South Africa, has acknowledged the need to reform that approach in Africa.
Across fourteen African countries, in 2025, credit rating agencies issued a mix of rating actions that highlight diverging credit trajectories.
Fitch Ratings for Namibia on 23 May 2025 affirmed Namibia’s Long-Term Foreign Currency (LTFC) Issuer Default Rating (IDR) at ‘BB-‘ with a Stable Outlook. On September 23, 2025, Moody’s Ratings (Moody’s) affirmed the Government of Namibia’s B1 long-term foreign currency and local currency issuer ratings and maintained the positive outlook.
The APRM researchers stated that to enhance the credibility, integrity, and developmental alignment of credit ratings in Africa, international CRAs must urgently reform how they engage with the continent, saying that the “current practices undermine the accuracy of ratings and erode trust among African governments and stakeholders.”
The APRM researchers also recommended that the credit rating agencies take practical steps to improve the contextual sensitivity and legitimacy of their ratings across the African continent.
This would be done by expanding the in-continent analysts’ presence across key African regions, to improve the credibility and accuracy of credit assessments in Africa, and by recruiting and deploying professionals who have local market expertise and who reside within Africa.
“This would enhance on-the-ground risk assessment capacity, improve the contextual accuracy of ratings and build long-term credibility with African sovereigns and investors,” the report read.
Furthermore, they added that such steps will enable agencies to broaden their scope of consultations during rating assessments, enabling continuous and context-sensitive engagement with African governments, institutions, and stakeholders.
The APRM researchers believe that diversity of input would enrich ratings with a fuller view of country-specific dynamics and reforms.
“Failure to evolve Africa-based operations reinforces perceptions of detachment and weakens the credibility of international CRAs’ assessments,” the APRM report highlighted.
The researchers also cautioned that generalised contagion assessments must be avoided and that incidents of misreporting in one country may raise red flags. As a result, CRAs must avoid region-wide generalisations that penalise fiscally-responsible states.
“Each sovereign should be assessed based on the strength of its own governance systems and transparency track record,” the researchers stated.
As for the African leaders, they are advised to address critical structural challenges that undermine investor confidence to strengthen the continent’s financial credibility and resilience in the global capital markets and creditworthiness.
In turn, this would improve fiscal data integrity, institutional capacity within debt management offices, and the fragile status of African multilateral lenders.
Policymakers, analysts, and researchers reached a consensus on the need to enhance domestic financing during the 2025 Africa Annual Conference on Credit Ratings. As a result, discussions about the Africa Credit Rating Agency (AfCRA) and the challenges Africa faces with credit rating agencies persists.
AfCRA promises to reshape the continent’s financial landscape by attracting investments that are better tailored to Africa’s economic realities.
erastus@thevillager.com.na
