ADDIS ABABA – In a decisive move to dismantle what has been described as a “credit rating cartel,” President Bola Ahmed Tinubu has issued a powerful call for the immediate operationalisation of an independent African credit rating agency. Speaking through Vice President Kashim Shettima at the 39th Ordinary Session of the African Union (AU) Assembly, the Nigerian leader argued that the current global financial architecture is systematically biased, costing the continent an estimated $75 billion annually in “excessive” interest payments.
The push for a homegrown institution, the Africa Credit Rating Agency (AfCRA), is no longer a mere policy suggestion but a strategic necessity. For decades, the “Big Three” global agencies have held a near-monopoly on sovereign creditworthiness, often applying a “one-size-fits-all” approach that creates a distorted financial lens.
President Tinubu maintains that these institutions frequently lack a sophisticated grasp of African domestic economies. He argues they tend to cluster diverse nations into a single risk category, imposing a “risk premium” that fails to account for genuine, real-time fiscal reforms. By ignoring unique economic trajectories, global agencies often penalise stable, reforming economies based on regional volatility elsewhere. This lack of nuance essentially taxes African development, making it significantly more expensive for transparent governments to access capital for infrastructure and social growth.
The Cost of Bias
The Nigerian President highlighted a frustrating paradox: while the IMF projects Africa to be the world’s fastest-growing region in 2026, only three African nations currently hold “investment grade” status. This discrepancy traps African governments in a cycle of expensive debt, where upgrades for hard-won reforms are painfully slow, but downgrades during global commodity fluctuations are instantaneous.
“Africa is paying too much to borrow,” Tinubu stated in a recent editorial supporting the AU initiative. “We cannot afford to wait years for international markets to recognise our progress. A continent-wide agency will capture reform momentum in real time, ensuring our nations stand on a level playing field.”
Strategic Financial Sovereignty
The proposed AfCRA, expected to be headquartered in Mauritius, is designed to complement rather than replace global agencies. Its primary strength will be its proximity to African finance ministries and central banks, allowing it to incorporate data that global analysts often overlook, such as the resilience of the informal sector and the stabilising role of domestic remittances.
Beyond just “marking its own homework,” the agency aims to:
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Reduce Information Asymmetry: Provide granular data on state-owned enterprises and sub-national governments.
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Mobilise Local Capital: Encourage African pension and insurance funds to invest more confidently in continental infrastructure.
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Counteract Subjectivity: Address the “opaque analyst discretion” that often penalises African states for political risks that are frequently exaggerated from afar.
The AFSM: Africa’s New Financial Shield
President Tinubu’s vision extends significantly further than credit ratings. He is spearheading a push for a wholesale overhaul of the international financial system, with the African Financing Stability Mechanism (AFSM) serving as the cornerstone of this new architecture.
Unlike traditional reactive bailouts, the AFSM is designed as a proactive “regional safety net.” Its primary purpose is to shield member states from volatile “external shocks”, such as sudden commodity price crashes or global interest rate hikes. By providing a coordinated response to financial risk, the mechanism ensures that a liquidity crunch in one nation does not trigger a systemic crisis across the region.
Ending the ‘Lonesome’ Crisis
Africa has long been the only continent without its own regional financial arrangement. While Europe has the European Stability Mechanism and Asia has the Chiang Mai Initiative, African nations have often had to navigate global market turbulence alone.
The AFSM provides three critical layers of protection:
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Emergency Liquidity: Access to rapid funding to bridge short-term gaps without the immediate stigma of a global debt crisis.
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Debt Refinancing: A vehicle to help countries restructure obligations on fairer, more sustainable terms.
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Stability Coordination: A unified platform for African finance ministers to synchronise their response to global economic shifts.
By integrating the AFSM into the continent’s broader strategy, Tinubu is advocating for a shift from “aid dependency” to “institutional resilience.” The goal is to ensure that when global markets sneeze, the African economy no longer catches a debilitating cold. This represents a move towards financial self-determination, providing the “shield” necessary for African nations to pursue long-term industrial goals without the constant fear of sudden capital flight.
Editor’s Note
This report was compiled by our regional bureau following the 39th Ordinary Session of the African Union Assembly in Addis Ababa. Our coverage is based on official summit communiqués, policy briefings from the Nigerian Presidency, and economic data verified by the African Development Bank (AfDB). At AfricanQuarters and Just Africa News, we are committed to providing independent, fact-based reporting on continental financial reforms. For corrections or further enquiries regarding this story, please contact our editorial desk.
