Downgrade of Afreximbank Defective Rating, Lampoon Aprm Fitch

The African Peer Review Mechanism (APRM) has described the recent decrease in African export-exports (Afreximbank) from the long-term default publisher (IDR) to ‘BBB-‘ from ‘BBB’, as defects, while calling for the assessment agent to re-examine the criteria.

Fitch Ratings, in the Ranking Action comments released on Wednesday, June 4 lowered the ranking of the default long-term publisher Afreximbank (IDR) to ‘BBB-‘ from ‘BBB’, which signifies “negative views”.

The Global Ranking Agency also reduced the short-term IDR to the bank to ‘F3’ from ‘F2’, and the long-term ranking in the global medium-term note program and the issuance of debt into ‘BBB-‘ from ‘BBB’.

Fitch said that the decline in ranking came from an increase in the ratio of non-labor work loans (NPLS) as calculated by Fitch, which exceeded the 6% ‘high risk’ threshold described in the Fitch criteria at the end-2024, “.

Menendang melawan downgrade, APRM dalam pernyataan yang diperoleh oleh Ripples Nigeria pada hari Minggu, 8 Juni 2025 berjudul “Penurunan peringkat Fitch dari peringkat Afreximbank didasarkan pada klasifikasi pinjaman yang cacat”, menyerukan kepada Badan Peringkat Global untuk memeriksa kembali kriteria dan asumsi lain dalam kasus ini dan untuk terlibat dalam konsultasi teknis dengan konsultasi teknis dengan AFREKS AFRROM-nya.

Aprm, a body mandated to provide support to African countries in the field of credit ratings note that objective, transparent, and unintelligent credit assessments are very important to ensure fair treatment of African institutions in the global financial system.

The statement reads, “APRM notes with the concern of Fitch Rating Classification of Afreximbank’s sovereignty exposure to the Ghana, South Sudan and Zambia government as NPLs.

“This classification causes critical legal, institutional, and analytic problems that are very debated by APRM. The assumption that Ghana, South Sudan and Zambia will fail to pay their loans to Afreximbank are not consistent with the 1993 agreement which established the bank where Ghana and Zambia were members of the founders, shareholders and signing.

“The multilateral agreement signed in 1993 is legally binding to all member countries, imposing specific legal obligations related to the protection, immunity, and financial operations of the bank.

“Based on this agreement, loans expanded by Afreximbank to its member countries are regulated by the framework of cooperation between government and reciprocal commitment, rather than typical commercial risk principles.

“Therefore, legally it is not in harmony to classify loans to member countries as not performing, especially when borrowing countries are shareholders in lending institutions, no formal default occurs and no rulers reject these obligations.

“The unilateral Treatment of Fitch’s Fitch’s sovereign exposure is to match the market-based commercial loans-even though they support the obligations of the agreement and the shareholders’ equity betting, defective.

“Doing this reflects a misunderstanding of the architecture of African financial institutions and the financial nature of intra-African development. Fitch has misinterpreted the invitation that was expanded by Ghana, South Sudan and Zambia to Afreximbank to discuss loan payments as an intention to default and/or to elevate the preferred status.

“APRM calls for Fitch’s ranking to re-examine the criteria and assumptions in this case and to be involved in technical consultations with Afreximbank and other relevant African stakeholders. Objective, transparent, and unintelligent context credit assessments are very important to ensure fair treatment of African institutions in the global financial system.

“APRM reiterates its commitment to promote accuracy in credit ranking”.

By: Babajide Okeowo