Fitch downgrades Afreximbank to ‘junk’ status amid dispute over Ghana debt restructuring

Fitch Ratings has downgraded the African Export-Import Bank (Afreximbank) into speculative, or “junk,” territory and withdrawn its future ratings, marking a dramatic escalation in an increasingly strained relationship between the global ratings agency and the Africa-focused lender.

In a statement issued on Wednesday, January 28, Fitch cut Afreximbank’s long-term credit rating to BB+ from BBB-, citing heightened concerns about the bank’s credit exposure, risk-management practices, and the possibility of financial losses linked to loans made to its member states.

The downgrade comes after months of disagreement between Afreximbank and Fitch over the agency’s assessment of the bank’s financial risks and institutional role in Africa’s development financing landscape.

Dispute Over Risk Exposure And Policy Importance

Fitch said its decision was influenced heavily by Afreximbank’s involvement in the recent debt restructuring in Ghana, which the agency believes signals a weakening of the bank’s policy importance and creditor protections.

“The bank’s inclusion in the restructuring underlines its weakening policy importance, in our view,” Fitch wrote.

The ratings agency also noted that the apparent losses the bank may have absorbed in the restructuring raised Afreximbank’s overall risk profile, shifting it from ‘medium risk’ to ‘high risk.’

Ghana’s $750m Loan Resolution Raises Alarm

The controversy is closely tied to Ghana’s handling of a $750 million loan owed to Afreximbank. On December 25, Ghana announced it had reached a “resolution” on the facility.

Reuters later reported that the Paris Club, a key group of official bilateral lenders, welcomed the resolution—an indication that Afreximbank may have accepted a restructuring loss.

Fitch interpreted this development as evidence that Afreximbank did not enjoy the kind of preferred creditor protection traditionally granted to multilateral lenders.
“We view this as evidence that Afreximbank did not benefit from its preferred creditor status,” Fitch stated.
Afreximbank Cuts Ties With Fitch
Afreximbank, which plays a major role in trade finance and export development across Africa, did not immediately respond to Reuters’ request for comment following the downgrade.

However, the bank had already announced days earlier that it was severing ties with Fitch, arguing that the ratings agency’s methodology no longer reflects an accurate understanding of Afreximbank’s mission.

On Friday, Afreximbank said it was ending its relationship with Fitch due to a “firm belief” that the agency’s rating approach fails to capture the lender’s mandate and developmental role on the continent.

Rating Withdrawal Leaves Moody’s as Only Remaining Major Rater

Fitch’s move to withdraw Afreximbank’s rating—described as being for “commercial reasons”—means the bank is now rated by only one of the “Big Three” global credit ratings agencies: Moody’s.

The development could have implications for Afreximbank’s borrowing costs, investor perception, and its future ability to raise funds in international capital markets, especially at a time when several African economies are undergoing debt restructuring and fiscal stress.

Broader Implications for African Development Finance

The downgrade highlights a growing tension between international ratings agencies and African multilateral lenders, particularly over how development banks should be assessed when operating in high-risk sovereign environments.