Credit rating methodologies face scrutiny over African debt assessments

Major credit-rating agencies, including Fitch, Moody’s, and S&P, are facing criticism for methodologies that may inaccurately assess risk in African markets. A primary point of contention involves the treatment of multilateral development banks (MDBs).

A recent dispute occurred between Fitch and Afreximbank. In June 2025, Fitch downgraded Afreximbank due to concerns regarding its sovereign loans to heavily indebted nations like Ghana and Zambia. Afreximbank contested this, arguing that as an MDB, it holds preferred-creditor status, meaning its loans should not be categorized as standard commercial debt. Despite a December 2025 agreement between Afreximbank and Ghana that prevented a default, Fitch maintained its stance. Consequently, Afreximbank terminated its contract with Fitch, leading the agency to issue an unsolicited downgrade to BB+ and withdraw coverage.

Senegal has also experienced significant volatility due to agency assessments. In October 2025, Moody’s downgraded the country for the third time in a year, citing an increased reliance on domestic and regional financing over Eurobond markets. This led to a sharp decline in Senegalese bond values. However, critics suggest these shifts toward regional debt may be a strategic move to reduce foreign-currency exposure rather than a sign of fiscal instability.