GCR affirms Afreximbank ratings, removes rating watch on reduced sovereign risk

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GCR Ratings has affirmed the African Export-Import Bank’s (Afreximbank) long and short-term issuer ratings at A and A2, respectively, removing the ‘Rating Watch Evolving’ designation and assigning a Stable outlook in a move that signals easing concerns over sovereign debt restructurings.

The rating agency also affirmed the international scale long-term programme rating on the bank’s $5 billion Global Medium Term Note Programme at A.

The outlook revision reflects GCR’s assessment of “immaterial downside risk related to sovereign debt restructurings,” following recent resolutions, including an agreement between Afreximbank and Ghana over a $750 million facility signed in 2022.

GCR cited the bank’s “robust counter-cyclical mandate, underpinned by a strong track record and ongoing preferential creditor treatment from shareholders” as key supports for the rating. South Africa recently reinforced this status by signing the Instrument of Accession to become a full sovereign member of the bank, affirming its Establishment Treaty and Preferred Creditor Status.

“The Bank’s solid capitalisation and diversified funding profile provide significant buffers against emerging credit risks,” GCR said in its report, also acknowledging the institution’s diverse shareholding base.

The affirmation follows a period of turbulence in the bank’s relationship with international rating agencies. In January, Afreximbank terminated its relationship with Fitch Ratings, citing a “firm belief that the credit rating exercise no longer reflects a good understanding of the Bank’s Establishment Agreement, its mission and its mandate”. Fitch subsequently downgraded the bank to ‘BB+’, below investment grade, before withdrawing its ratings entirely.

The dispute centred on whether Afreximbank enjoys preferred creditor status similar to that of the IMF and World Bank, which protects loans from losses during sovereign debt restructurings. While Fitch viewed Ghana’s debt treatment as evidence that the bank did not benefit from such status, Afreximbank maintains its 1993 Establishment Agreement, signed by 53 African states, enshrines this protection.

Commenting on the GCR rating action, Chandi Mwenebungu, Managing Director and Group Treasurer at Afreximbank, emphasised that preferred creditor treatment is “enshrined in the Bank’s Establishment Agreement, ratified by all member states. It is not a matter of opinion or convention; it is a fact.”

GCR’s assessment noted that Afreximbank’s risk profile remains resilient, with a non-performing loan ratio of 2.5 per cent as of September 2025, up marginally from 2.4 per cent at the end of the first quarter. The agency projects the ratio will remain below 3.0 per cent over the next six to 12 months.

The bank’s funding structure is “intentionally diversified,” GCR said, while capitalisation remains robust with a GCR leverage ratio of 17.1 per cent in the third quarter of 2025, up from 16.9 per cent at December 2024.

Mwenebungu added that GCR’s acknowledgement of the bank’s “strong liquidity and capitalisation, and resilient risk profile” is testament to its financial and operational strength “in the face of continued macro-economic pressures and a challenging environment.”

Afreximbank’s risk management framework was independently assessed in 2025 and certified as complying with international standard ISO 31000:2018, with zero non-conformities identified.

The bank maintains investment-grade ratings from Moody’s (Baa2), China Chengxin International Credit Rating (AAA), and Japan Credit Rating Agency (A-). Total assets and contingencies stood at over $40.1 billion as of December 2024, with shareholder funds of $7.2 billion.