Fitch Ratings on Wednesday downgraded the African Export-Import Bank’s (Afreximbank) long-term issuer default rating to BB+ from BBB-, officially placing the Cairo-based lender in junk territory.
The agency also cut its short-term IDR to B from F3 and lowered long-term ratings on Afreximbank’s global medium-term note programme to BB+ from BBB-, but retained the bank’s outlook as stable.
The move comes days after Afreximbank announced it had severed ties with Fitch, citing concerns that the agency’s methodology failed to reflect the bank’s legal mandate, treaty protections, and unique role in financing African trade and development.
In a statement last Friday, Afreximbank said the rating model “no longer reflects a good understanding of the Bank’s Establishment Agreement, its mission and its mandate”
Following the announcement, Fitch has withdrawn all coverage of the bank, saying it would no longer provide analytical support.
“Fitch has chosen to withdraw the ratings for commercial reasons,” the agency said in a statement on Wednesday.
Ghana debt restructuring drives downgrade
Fitch said the downgrade primarily reflected a reassessment of Afreximbank’s policy importance and business profile after the lender reached an agreement in principle with Ghana last month on a $750 million sovereign loan in default.
According to the agency, the deal showed that the lender did not receive preferential treatment, undermining its standing as a preferred creditor.
“We view this as evidence that Afreximbank did not benefit from its preferred creditor status (PCS),” Fitch said.
Fitch explained that while it had not previously provided any uplift in solvency for PCS, Afreximbank had historically benefitted from de facto preferential treatment, common among multilateral development banks. “The bank’s inclusion in Ghana’s restructuring underlines its weakening policy importance, in our view,” Fitch added.
The reassessment prompted Fitch to raise Afreximbank’s policy importance risk to medium from low and business profile risk to high from medium, citing exposure to a high-risk operating environment marked by weak credit quality, low income per capita, and elevated political risk across its member countries.
Governance and strategy risks were also flagged as elevated. The overall business environment notch fell to -3.
Credit profile and shareholder support
Despite the downgrade, Afreximbank’s standalone credit profile remains BB+, supported by a solvency assessment of BBB+ and liquidity rating of A. Fitch highlighted strong capitalisation, moderate risk levels, and access to diversified funding, including $2.1 billion in credit lines.
Shareholder support, including from Egypt and Nigeria, was assessed at BB-, reflecting past capital injections, dividend reinvestments, and callable capital coverage.
With the Afreximbank-Fitch relationship severed, investors must now rely on alternative credit assessments or internal analysis to gauge the lender’s risk profile.
At the same time, the bank’s decision underscores a broader trend in Africa, where institutions are increasingly seeking greater control over how their creditworthiness is evaluated internationally.
