APRM Warns Fitch Over Flawed Afreximbank Rating Adjustment.

Monday 9th June 2025

Par inAfrika Reporter

In response to Fitch Ratings’ recent downgrade of Afreximbank, the African Peer Review Mechanism (APRM) has called for an urgent reassessment, citing “flaws” in how sovereign exposures were classified. Fitch lowered Afreximbank’s long-term foreign currency issuer default rating from ‘BBB’ to ‘BBB–’, citing perceived credit risk tied to non‑performing loans (NPLs) in Ghana, South Sudan, and Zambia. Fitch’s estimate of a 7.1% NPL ratio starkly contrasts with the bank’s self-reported 2.44%.

The APRM contests Fitch’s classification of loans to member-state governments as if they were commercial-risk exposures. These loans are protected under the 1993 founding treaty, which grants Afreximbank a sovereign framework and immunities. APRM asserts that calling these NPLs misinterprets both the legal structure and governance framework under which Afreximbank operates.

The mechanism also highlights that none of the borrower governments Ghana, Zambia, or South Sudan have defaulted, and all remain active shareholders. APRM argues that Fitch’s methodology conflates sovereign trust obligations with default risk, demanding a more nuanced, legally grounded approach.

In light of this, APRM urges Fitch to engage with Afreximbank and African stakeholders to refine its rating approach. It contends that ratings must incorporate intergovernmental nuances and treaty protections to ensure fairness and accuracy especially for pan‑African development institutions.

APRM reaffirms its commitment to transparent, context-aware credit analysis and warns against blanket assessments that could undermine African financial institutions on the global stage. It calls for a systematic dialogue to improve rating practices and protect Africa’s evolving financial architecture.