Standard & Poor’s (S&P) Global Ratings), on Wednesday declared that it assigned its ‘A’ long-term and ‘A-1’ short-term issuer credit ratings to Africa Finance Corporation (AFC) with a positive outlook.
The positive outlook reflects expectation that AFC will execute its strategy by further diversifying its shareholder structure and expanding its capital base, while sustaining strong capital and liquidity levels.
S&P, however, stated that it could revise the outlook to stable if AFC failed to make meaningful progress in achieving a more diversified shareholder structure.
In a statement, the ratings institution said a significant drop in capital or liquidity could also pressure “our assessment of AFC’s financial risk profile and lead to a negative rating action”.
On the other hand, it stated, “We could raise the ratings if AFC meaningfully expands its sovereign shareholder base to the extent that investments represent more than token stakes, reducing the corporation’s concentrated shareholder nature.
“We could also consider a positive rating action if capitalisation levels strengthen materially, for example, through continued progress in raising equity.”
S&P further said the AFC ratings reflected its assessment of the corporation’s strong enterprise risk profile and strong financial risk profile.
The statement said AFC had a mandate to address structural investment gaps across Africa, playing an important role in financing critical infrastructure and catalysing private sector lending.
It said the corporation’s ongoing capital increases reflected strong shareholder support, “but the corporation’s shareholder base remains concentrated, with the Central Bank of Nigeria and Nigerian financial institutions representing about 75 per cent of total shareholding”.
S&P, however, pointed out that despite modest capitalisation relative to peers, AFC maintained a “robust asset-quality track record and very strong liquidity coverage”.
Established by treaty in 2007, AFC has a mandate to address structural investment gaps and catalyse private-sector lending across Africa.
Structured as a public-private partnership (PPP), AFC plays a pivotal role in funding infrastructure, industrial development, and natural resource projects across the continent.
In addition to providing financing, the corporation offers transaction advisory, deal structuring, project development, and principal investment services throughout the entire infrastructure project lifecycle.
Since inception, it has disbursed a cumulative $18.5 billion across 36 African countries as of year-end 2025, underscoring its scale and strategic importance in advancing Africa’s development agenda.
AFC’s investment pipeline is anchored by projects that close critical infrastructure gaps while supporting national development priorities. It specialises in sectors, such as power, transport and logistics, natural resources (including mining, oil, and gas), heavy industry, telecommunications, and technology.
Although the shareholder base remains diversified in terms of the number of entities, it remains concentrated, with CBN holding a dominant 39 per cent stake. This is one of the highest concentrations among rated MLIs.
In addition, Nigerian financial institutions account for an additional 40 per cent of total shareholding, elevating agency-risk considerations relative to similarly rated peers.
Many other sovereign shareholders have very small token stakes, less than 0.5 per cent in the institution, potentially indicating a limited commitment to AFC.
Overall, AFC’s shareholders score lower on the World Bank’s governance effectiveness indicators than global peers, with Nigeria (39 per cent), Egypt (7 per cent), Turkiye (3 per cent), and the Public Investment Corp. of South Africa (3 per cent) representing the largest regional and non-regional sovereign shareholders.
Positively, no major shareholder has ever withdrawn from the institution, the statement added.
James Emejo
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