By Vivian Ihechu
The New Africa Credit Rating Agency (AfCRA) is operational and ready to work with governments and businesses seeking credit assessments, its Interim Chief Executive, Dr Sifiso Falala, said at the agency’s inauguration in Mauritius.
The News Agency of Nigeria (NAN) reports that the African Union (AU) appointed South African Falala as interim chief executive officer of the AfCRA, as the continent moves to establish a privately owned credit rating institution focused on African markets.
AfCRA was formally launched in Port Louis, Mauritius, where it will be headquartered, following years of discussions over the creation of an African credit rating institution.
The initiative was first championed by the AU in Addis Ababa roughly eight years ago.
Speaking on the sidelines of the inauguration monitored by the News Agency of Nigeria, Falala said the agency had put economic data parameters online and established research and analytical teams to support its work.
He said, “As we launch the agency, we are fully prepared to do business with the entities that might be interested in getting us to do business with them.
“We have a research team that is capable of collating data at an international level for various countries; we have an analytical team that has expertise in analysing such data and translating that into insights that can inform our outputs.
“We will eventually, of course, produce rating certificates, reports, and recommendations.”
Sovereign ratings will be AFCRA’s initial priority, Falala said, because governments’ economic conditions affect the operating environment for businesses.
He also noted that the biggest problem for Africa rested with the sovereigns, because they were the pivot for the commercial side.
He added that commercial entities could struggle to succeed when sovereigns were economically weak or faced extensive debt-servicing costs.
Falala added that, while sovereigns were the immediate focus, AfCRA also intended to engage with commercial clients.
For African nationals, the agency’s potential value would lie in contributing to a fuller, evidence-based picture of African economies and businesses.
More contextual analysis could give governments, investors and companies another source of information when assessing risks and opportunities.
Such analysis may support better-informed decisions, although AfCRA’s ratings alone cannot guarantee investment, economic growth or improved living standards.
Falala said the agency was established to address gaps in data and research affecting the continent.
He described the challenge as one shared across Africa’s 55 nations, saying: “It’s a data problem. It’s a research problem.”
He said AfCRA hopes its research will help unlock value within African states, adding that the agency’s approach will combine desk-based analysis with field research.
Falala said its structure includes a chief ratings officer and analysts, alongside research expertise using technology to search for and validate information, with human validation as part of the process.
AfCRA plans to draw on data from multilateral institutions, including the World Bank and International Monetary Fund, as well as reserve banks, finance ministries and interviews with industry participants.
Falala said each data point would be tested for its relevance to rating outcomes, adding that researchers across the continent are expected to conduct primary research in different countries.
He said the agency was “in the process of also doing AI integration and defining exactly where AI would be involved.”
Commercially, AFCRA will focus on commissioned ratings requested by clients, Falala said, noting that the agency is already receiving requests and mandates which are needed to establish its commercial base.
He said the ratings could provide an additional perspective for investors considering African markets and sectors such as mining, oil and gas, hospitality and tourism.
“We are not asking them to stop using the agencies that they currently use.
“We are simply saying, would you like to have another additional data point?”
On independence, Falala said AfCRA was a privately owned company and operated separately from the Africa Peer Review Mechanism (APRM) that set it up.
He said the contract under which the agency had been formed had ended, while APRM remained a stakeholder rather than being involved in daily operations.
Falala said independence, evidence and transparency were essential to the agency’s credibility.
“We need to ensure that we are trusted as an organisation based on the evidence that we share, the objectivity of the organisation, and the transparency of our rating systems.
“The contract that we signed with the African Peer Review Mechanism (APRM) was mandating us and giving us an objective and a purpose, which has now terminated our relationship in terms of that contract.
“So, we are a privately-owned PTY organisation that operates completely independently.
“They are a stakeholder, like we have stakeholders such as banks, the commercial entities, the media as a stakeholder, the public as a stakeholder, and likewise APRM is a critical stakeholder for us.
“But they are not involved directly in the operations of the business,” he assured.
NAN reports that Falala is currently the CEO of Centurion-based Sovereign Ratings Africa.
The Africa Credit Rating Agency has a mandate to provide an alternative to a field dominated by the big three Western global ratings agencies.
It will be owned by private investors, and will be based in Port Louis, Mauritius.
AfCRA will be complementing existing global credit rating agencies by offering a perspective rooted in African data, expertise and realities.(NAN) www.nannews.ng
Edited by Oluwafunke Ishola
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