President Yoweri Museveni has warned African leaders against using the newly established Africa Credit Rating Agency (AfCRA) to give their countries favourable ratings, saying the agency must provide an accurate assessment of their economies.
Museveni said the agency should help African countries understand their economic position, manage debt and expand trade under the African Continental Free Trade Area (AfCFTA).
He made the remarks at the official launch of AfCRA in Mauritius, where he was represented by State Minister for Finance, Planning and Economic Development Amos Lugoloobi.
Museveni, who chairs the African Peer Review Forum of Heads of State and Government, said Africa needed stronger capital markets, credible financial institutions and reliable credit information to attract investment and support economic transformation.
He said the continent’s challenge was not a lack of economic potential but difficulty mobilising sufficient financing at affordable rates.
The agency was established amid complaints from African governments and civil society organisations that international credit rating agencies, including S&P Global Ratings, Fitch Ratings and Moody’s, have undervalued African economies, contributing to high borrowing costs.
However, the African Forum on Debt and Development (AFRODAD), which has campaigned for an independent African rating mechanism, says AfCRA’s credibility will depend on its independence and transparency.
AFRODAD Executive Director Janet Zhou said the agency must be protected from political interference and apply rigorous rating methods.
“However, AfCRA’s credibility will depend on its independence, transparent methodologies, technical rigour, strong governance and protection from political interference. It must provide ratings that are trusted because they are rigorous, not simply because they are African,” Zhou said.
Mauritius Minister of Financial Services and Economic Planning Jyoti Jeetun said the agency was intended to provide a more accurate assessment of African economies, rather than simply give them better ratings.
“AfCRA is not about asking the world to rate Africa more favourably. It is about helping the world understand Africa more accurately,” Jeetun said.
African Union Commission Chairperson Mahmoud Ali Youssouf also stressed the need for the agency to remain independent to gain the confidence of investors and financial markets.
AfCRA is intended to assess sovereign borrowers, financial institutions and private companies. Although established under the African Union framework, it is expected to operate independently and finance its activities through shareholder capital and operational revenue.
The African Union says international rating agencies give African economies average ratings ranging between B and B-minus, compared with BB ratings for other emerging regions, a disparity it says discourages credit and capital flows into the continent.
The cost of servicing external debt has also increased sharply. According to the African Union, Africa’s annual external debt service rose from 61 billion US dollars in 2010 to 163 billion dollars in 2024. Some countries now spend more on debt repayments than they allocate to essential social services, including health, education and sanitation.
In Uganda, debt servicing accounts for 33.4 trillion shillings in the 2026/2027 national budget, making it the largest expenditure item, compared with 13.5 trillion shillings allocated to human capital development.
Economist Dr Fred Muhumuza said AfCRA would only address the concerns surrounding international ratings if investors trusted its assessments.
“A rating agency cannot succeed simply because it is African. It must be trusted. If investors believe our agency is influenced by political pressures, then we will not solve the problem; we will deepen it,” Muhumuza said.
He said credit rating agencies should consider more than indicators such as economic growth and foreign exchange reserves.
They should also assess the stability of political institutions, the credibility of fiscal policies and the consistency of economic reforms.
Muhumuza added that assessments of political and institutional risks should not automatically be interpreted as bias against African countries, but as part of evaluating their economic circumstances and exposure to risk.