Dr. Misheck Mutize, Lead Technical Expert for the AU-APRM Credit Ratings Programme, has called out global rating agency Fitch for its contradictory assessment of the African Export-Import Bank (Afreximbank), arguing that no other institution has been as responsive in supporting the continent’s financial needs.
In a resounding endorsement of the bank’s approach, he said,
“If they step back, there is no institution that has actually been prepared to step into this space.”
Speaking during an interview on ARISE NEWS on Thursday, Dr. Mutize strongly defended Afreximbank’s preferred creditor status (PCS), describing it as a crucial mechanism that allows African multilateral financial institutions to function during crises when commercial lenders retreat.
“It’s about the whole African financial ecosystem,” Dr. Mutize explained. “So the bottom line is that in the framework of lending in the multilateral sphere… when there is a crisis, commercial lenders who are after return normally step back. So that’s when institutions like the multilateral financial banks have to step in to keep a country going.”
He elaborated that the PCS, though unwritten, is essential for protecting the financial credibility and operational reach of institutions like Afreximbank during economic stress.
“The borrower will still repay what they owe to them before they repay any other creditor… So that’s the whole concept in short of a preferred creditor status.”
Addressing the controversy between Ghana and Afreximbank over a $750 million facility, Dr. Mutize said the standoff was overstated. He stated that “there is no intention of default from Ghana, which is the bottom line,” adding that “Ghana is going to repay what it owes to Afreximbank, and Ghana is also a shareholder of Afreximbank.”
He criticised Fitch Ratings for downgrading Afreximbank while simultaneously upgrading Ghana, saying the agency’s move was inconsistent.
“You can’t classify the borrowing country as having improved substantially… while downgrading Afreximbank based on the same loan,” he said. “So, in our view, I think Fitch is trying to make up to a situation that it created by downgrading Afreximbank.”
Dr. Mutize used the situation to amplify calls for Africa to establish its own credit rating agency, arguing that global agencies often operate with a lack of contextual understanding and regional appreciation.
“So indeed, it does present another leverage to advance the need for having an African-based rating agency,” he asserted.
On the broader consequences of the downgrade, he warned, “Over the medium term… you obviously see a substantial increase in borrowing cost, especially if the issue of preferred creditor status… is destabilized.”
Citing Afreximbank’s crucial intervention in financing key African infrastructure, including the Dangote Refinery, Dr. Mutize said global discomfort with the bank’s growing influence was evident. “There was no other institution that would have supported that (Dangote refinery) project… Even the case of Ghana… this loan… was advanced to this government when it was already in default.”
Faridah Abdulkadiri
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