The African Export-Import Bank (Afreximbank) on Friday disclosed that it had formally terminated its credit rating relationship with Fitch Ratings.
A news report from African Press Organisation (APO) Group circulated on behalf of the merchandize trade promoting bank indicated that the decision to terminate the rating deal with Fitch Ratings was sequel to a review of the relationship, and its firm belief that the credit rating exercise no longer reflects a good understanding of the Bank’s Establishment Agreement, its mission and mandate.
The online news medium reported that Afreximbank’s business profile remained robust, underpinned by strong shareholder relationships and the legal protections embedded in its Establishment Agreement, signed and ratified by its member states.
It would be recalled that in recent times, many banking, economic and development research experts have been faulting the rating criteria of major foreign ratings companies on African economies, based on what they considered as the peculiar economic macroeconomic factors, which are not usually considered by the foreign agencies.
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For instance, Nigeria’s Minister of Budget and Economic Planning, Sen. Abubakar Bagudu, has consistently been criticising the foreign rating agencies and international bodies for using subjective or incomplete data that misrepresented the economic performance of African nations, particularly Nigeria.
This is even as the UN Development Programme (UNDP) had at the sidelines of the the IMF/World Bank spring meetings on 14 April 2023 joined forces with the Brookings Institution and Senegalese development advisory firm Africatalyst to demand changes in the credit ratings of Sub-Saharan Africa’s (SSA’s) economies by the foreign rating agencies.
The UNDP in its then report estimated that “subjective” rankings of the economies were costing 21 African countries a combined $74.5bn a year in excess interest payments and lost financing.
