Why Afreximbank’s break with Fitch exposes a deeper rift

February 13, 2026 in Letters, Opinion by Editor

 

By Dr. Macharia Kihuro

In a recent public statement, the African Export-Import Bank (Afreximbank) announced that it would terminate its credit rating relationship with Fitch Ratings. The reasoning was unusually direct. The bank said it no longer believed the credit rating exercise reflected a proper understanding of its Establishment Agreement, its mandate, or its mission. It underscored that its business profile remains robust, supported by strong shareholder relationships and the legal protections embedded in its founding treaty, which has been signed and ratified by member states.

At the heart of the disagreement lies a long-running debate in global finance: should rating agencies apply a uniform methodology to all banks, or should their frameworks be adapted to reflect institutional differences? More specifically, should a commercial bank be assessed under the same criteria as a multilateral development bank (MDB)? Afreximbank argues that this distinction was not adequately reflected in Fitch’s assessment, resulting in what it considers a mischaracterisation of its credit standing.

Fitch’s “Bank Rating Criteria” relies on a two-part structure for both commercial banks and MDBs. The first component is a Core Quantitative Model (CQM), which calculates a Viability Rating based on financial metrics such as asset quality and capital adequacy. This forms the initial rating anchor. The second element is a Support Rating framework, which evaluates external backing. For MDBs, this theoretically considers the contractual commitments of member states under the institution’s Establishment Agreement. In certain cases, Fitch employs a “credit substitution” approach, linking an MDB’s rating to the creditworthiness of its strongest shareholders.

The rupture became public on January 28, 2026, when Fitch downgraded Afreximbank from ‘BBB-’ to ‘BB+’ before subsequently withdrawing all ratings. The downgrade moved the bank’s long-term issuer default rating into non-investment grade territory. Afreximbank responded by ending the relationship, arguing that the methodology was flawed, damaging to its mission and reflective of a broader pattern affecting African financial institutions.

The confrontation raises fundamental questions. Are global rating methodologies structurally biased against African institutions? Or did Afreximbank misinterpret the framework and react disproportionately? Beyond the immediate dispute lies a more consequential issue: what are the practical implications for the bank, the continent’s financial architecture and the credibility of international rating standards?

Afreximbank is not alone in raising concerns. Across Africa, there is a persistent belief that the methodologies of the “Big Three” agencies — Fitch, Moody’s and S&P — fail to sufficiently account for regional context and therefore produce unduly punitive outcomes. The agencies dispute this, pointing to consistent global standards and risk-based metrics. The result is a familiar impasse.

Several African sovereigns have publicly challenged ratings decisions. Ghana suspended formal engagement with the three major agencies in 2022 following successive downgrades to non-investment grade, arguing that pro-cyclical actions deepened its debt crisis. Kenya, Rwanda, Nigeria and South Africa have also lodged formal appeals in the past. The African Development Bank, under its former president Akinwumi Adesina, mounted a sustained campaign describing certain credit assessments as arbitrary and insufficiently contextualised.

The Afreximbank episode therefore reflects a broader structural tension rather than an isolated dispute. It highlights a persistent gap between agency assessments and institutional self-perception, compounded by strained communication and diverging interpretations of risk.

The way forward requires more than rhetorical exchanges. Stakeholders must engage in structured dialogue aimed at ensuring both credible risk assessment and contextual fairness. Through platforms such as the African Union and other pan-African institutions, a coordinated approach could seek greater transparency in rating methodologies, clearer treatment of qualitative factors and tailored frameworks for African MDBs and sovereigns with strong governance structures.

Ultimately, the break between Afreximbank and Fitch underscores a deeper rift in the global financial architecture. If unresolved, it risks entrenching mistrust. If addressed constructively, however, it could catalyse reforms that strengthen both rating credibility and Africa’s integration into global capital markets.