AU disputes Fitch’s downgrade of Afreximbank
The African Peer Review Mechanism (APRM), an arm of the African Union, has criticised Fitch Ratings’ recent downgrade of Afreximbank, calling it inaccurate and legally questionable.
Last week, Fitch Ratings lowered Afreximbank’s credit rating from BBB to BBB-, just one notch above junk status, citing elevated credit risks and what it described as weak risk management policies. The agency pointed to what it claimed was a non-performing loan (NPL) ratio exceeding 6 percent, breaching its own high-risk threshold.
However, the APRM, which is tasked with establishing an African Credit Rating Agency later this year, has strongly contested Fitch’s methodology. In a statement, the APRM accused Fitch of misclassifying sovereign loans to Ghana, Zambia, and South Sudan as non-performing, despite Afreximbank itself reporting an NPL ratio of only 2.44 percent as of March 2025.
“This classification raises critical legal, institutional, and analytical issues which the APRM strongly contests,” the statement said.
The APRM further argued that Fitch’s assumptions violate the 1993 treaty that established Afreximbank—signed by Ghana and Zambia among others—which grants the bank preferred creditor status and legally shields its sovereign exposures from commercial risk classification.
Fitch has since defended its downgrade decision, stating that it follows a globally consistent and transparent ratings methodology for all supranational institutions. In a response to Reuters, the agency noted that all ratings are based on independent analysis, in accordance with publicly available criteria.
“All Fitch’s supranational rating decisions are taken solely in accordance with one globally consistent and publicly available rating criteria,” the agency said.
The downgrade comes at a sensitive time for Afreximbank, which is seeking to protect its loans from being included in debt restructuring negotiations involving several African countries, including Ghana, Zambia, and Malawi. The bank insists that, as a multilateral financial institution, its loans are exempt from such processes.
The APRM has called for immediate dialogue between Fitch, Afreximbank, and other African financial bodies to review the rating decision, which it warns could have serious implications for the cost of borrowing and investment confidence across the continent.
“Fitch’s unilateral treatment of these sovereign exposures—as comparable to market-based commercial loans—despite their backing by treaty obligations and shareholder equity stakes, is flawed,” the APRM added.
Afreximbank has yet to officially respond to the downgrade, but in previous communications, it maintained that it is not engaged in any restructuring discussions with member states.
Founded to support intra-African and international trade, Afreximbank has emerged as a critical player in financing development across the continent. Its exposure to sovereign borrowers is governed by intergovernmental frameworks and legal obligations, the APRM noted—adding that these factors distinguish the bank from typical commercial lenders.
