Afreximbank gets investment-grade backing from S&P after Fitch downgrade

African Export-Import Bank (Afreximbank) has secured a BBB+ investment-grade rating from S&P Global Ratings, three notches above Fitch Ratings’ earlier BB+ assessment, highlighting a sharp divergence in how major agencies view the pan-African lender.

The rating underscores Afreximbank’s growing role in financing trade, industrialisation and economic development across Africa.

The latest assessment also comes five months after Fitch downgraded the Cairo-based lender’s Long-Term Issuer Default Rating to BB+ from BBB- and cut its short-term rating to B from F3. Fitch subsequently withdrew its ratings in January after Afreximbank terminated its rating mandate with the agency.

At the time, the global agency said the downgrade reflected a reassessment of the bank’s policy importance following Ghana’s debt restructuring agreement with Afreximbank as part of the country’s broader sovereign debt workout.

A BB+ rating is considered non-investment grade, or “junk” status, while S&P’s BBB+ rating places the bank firmly within investment-grade territory.

S&P cites expanding continental role and shareholder support

In announcing the rating, S&P cited in a report that Afreximbank’s strengthened policy role across the continent, its expanding shareholder support base and its growing importance as a countercyclical lender during periods of economic stress.

“In our view, Afreximbank’s strong track record of delivering on its mandate underscores its strategic importance,” the report said on Thursday.

The agency noted that the bank’s policy relevance has increased significantly in recent years, supported by rapid balance-sheet expansion and repeated capital injections from shareholders.

Between 2015 and 2025, Afreximbank’s total assets grew to $42.3 billion from $7.1 billion, while shareholders’ equity rose to $8.4 billion from $1.3 billion. Paid-in capital increased to $3.8 billion from $511 million over the same period.

“This sustained and rapid growth distinguishes the bank from other smaller, private-sector-focused regional peers and underscores its mandate to serve as an important partner in facilitating trade across the continent,” S&P said.

The stable outlook reflects what S&P described as a balance between Afreximbank’s lower capital and liquidity levels relative to some highly rated multilateral lenders and its increasingly important development role across Africa.

Beyond lending activities, the agency highlighted Afreximbank’s role in building continental trade infrastructure through initiatives such as the Pan-African Payment and Settlement System (PAPSS), the AfCFTA Adjustment Fund and the African Trade Gateway.

PAPSS currently operates in 20 African countries and is supported by more than 175 financial institutions, helping facilitate cross-border payments in local currencies and reducing reliance on external reserve currencies.

Despite the positive assessment, S&P identified several constraints on the rating.

The agency noted that the bank’s liquidity metrics remain weaker than those of many highly rated multilateral development banks. As of September 2025, the bank’s six-month liquidity coverage ratio stood at 0.95x, while its 12-month ratio was 0.71x.

S&P also cited risks stemming from sovereign debt restructurings, particularly following recent payment challenges involving Ghana and Zambia, as well as the bank’s partially commercial operating model and dividend distribution policy.

The agency said the rating could be downgraded over the next 18 to 24 months if liquidity weakens further, shareholder support declines, or capital levels come under pressure.

Conversely, an upgrade could be considered if the bank significantly strengthens its capital position and liquidity buffers while maintaining its expanding policy role across the continent.

Rating divergence revives scrutiny of agency methodologies

The rating announcement is also likely to revive debate over the assessment of African multilateral financial institutions.

According to Misheck Mutize, lead expert on rating agencies and country support, the difference between S&P’s investment-grade assessment and Fitch’s earlier downgrade raises questions about how African development finance institutions are evaluated.

“One cannot help but question whether Fitch Ratings’ downgrades of Afreximbank were entirely about fundamentals,” Mutize wrote on LinkedIn.

He argued that credit rating agencies must remain focused on their core mandate of objectively assessing credit risk and providing reliable information to investors.

Founded in 1993, Afreximbank was established to promote trade finance, support export development and deepen economic integration across Africa. Today, the lender operates across all 54 African countries and plays a central role in advancing intra-African trade under the African Continental Free Trade Area .

For investors, S&P’s BBB+ rating reinforces Afreximbank’s standing as one of Africa’s most strategically important development finance institutions, even as debate continues over how the continent’s multilateral lenders should be assessed by global rating agencies.