APRM Criticizes Fitch for Flawed Downgrade of Afreximbank Rating
The African Peer Review Mechanism (APRM) has strongly criticized Fitch Ratings for what it calls a “flawed” and “legally incongruent” downgrade of the African Export-Import Bank (Afreximbank), citing serious concerns over the misclassification of sovereign loans.
On June 4, 2025, Fitch downgraded Afreximbank’s long-term foreign currency issuer default rating from ‘BBB’ to ‘BBB-’ with a negative outlook. The move, Fitch argued, was driven by a rise in credit risk and alleged weaknesses in risk management.
Central to Fitch’s justification was its claim that the bank’s non-performing loans (NPLs) stood at 7.1%—a figure significantly higher than the 2.44% disclosed by the bank.
Fitch reportedly reached its estimate by classifying Afreximbank’s sovereign exposures to Ghana (2.4%), South Sudan (2.1%), and Zambia (0.2%) as non-performing. However, the APRM has refuted this classification, stating that none of these governments have defaulted or repudiated their obligations.
“The classification raises critical legal, institutional, and analytical concerns,” the APRM said in a statement. “It ignores the 1993 multilateral Treaty establishing Afreximbank, which binds member states—including Ghana and Zambia—as shareholders with legal obligations to the Bank.”
According to the APRM, Fitch’s assessment undermines the bank’s unique legal and governance framework, which is based on intergovernmental trust rather than conventional commercial lending standards. Afreximbank, founded to facilitate and expand intra-African trade, operates under treaty-based protections that Fitch allegedly failed to consider.
“Fitch’s unilateral treatment of these sovereign exposures as commercial non-performing loans reflects a misunderstanding of the governance architecture of African financial institutions,” the APRM added, insisting that such loans are not comparable to typical market-based lending.
The organization further clarified that the invitation by the concerned countries to hold discussions on loan repayments should not be interpreted as an intent to default, nor does it affect the Bank’s Preferred Creditor Status.
Calling for an urgent review, the APRM urged Fitch to hold technical consultations with Afreximbank and other African stakeholders to ensure more context-aware and balanced assessments.
“Objective, transparent, and context-intelligent credit assessments are vital for ensuring fair treatment of African institutions in the global financial system,” said Dr. McBride Nkhalamba, Acting Director of Governance & Specialised Reporting at APRM.
The APRM reaffirmed its mandate, under AU Assembly Decision [Assembly/AU/Dec.631(XXVII)] and Article 6(g) of its Statute, to independently review and challenge credit rating decisions affecting African states and institutions.
