Afreximbank, Africa’s multilateral trade finance institution, received an encouraging announcement on Monday from Moody’s, the global credit rating agency.
In a statement from the trade finance institution, it said that in its annual credit analysis, Moody’s had reaffirmed its Baa1 rating with a stable outlook. This rating is based on three key criteria: capital adequacy, liquidity, and funding, along with the strength of member support.
Moody’s acknowledges that Afreximbank plays a critical role under the African Union umbrella, receiving regular capital infusions and actively supporting the implementation of the African Continental Free Trade Agreement.
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The consistent provision of new capital by the Bank’s member states has been cited as a significant factor, giving Afreximbank the flexibility to navigate the challenging economic and financial conditions worldwide, including higher inflation and tighter monetary measures. This reaffirmed rating stands as a testament to Afreximbank’s steadfast commitment to bolstering trade and economic growth across Africa.
Moody cites Afreximbank’s credit strengths as being a specialized African trade finance institution with a niche, supporting asset performance as well as having sound profitability and market access at favorable rates.
Benedict Oramah, President of Afreximbank, said: “Afreximbank is delighted to maintain its positive credit rating from Moody’s, which reflects the Bank’s disciplined approach to its balance sheet and financial health, as well as its capacity to deliver its mandate even in periods of macroeconomic uncertainty and instability.
“Afreximbank’s creative and cautious approach to its own financing as well as its solid capital base has enabled it to intervene to help member states’ economies as a combination of global conflicts, the lingering effects of the pandemic, and increasing global supply chain disruptions threaten the pace and scale of development here in Africa.”
In June 2023, Fitch Ratings also affirmed Afreximbank’s long-term Issuer Default Rating (IDR) at BBB, with a stable outlook, and its short-term Issuer Default Rating at F2 and the long-term ratings on the bank’s Global Medium Term Note Programme and Debt Issuances at BBB.
In addition, Fitch acknowledged Afreximbank’s strong capital and liquidity position noting that the bank had a strong liquidity profile, has strengthened its institutional role and raised its profile as the main multilateral development bank focused on supporting the public and private sectors in Africa.
Speaking on both ratings, Chandi Mwenebungu, Afreximbank Group Treasurer & Director of Treasury and Markets, said: “The Moody’s and Fitch ratings are a strong testament to Afreximbank’s development mandate on the continent. We are committed to continuing to build a solid platform to deepen our partnership with clients and member states, to deliver sustainable growth and development. This rating proves our risk discipline and continues to show that our capital and liquidity is strong. As we embrace the future, we remain poised to chart a path of progress and prosperity for the continent.”
