Fitch Downgrades Afreximbank to High Risk Over Ghana Debt Deal, Ends Rating Coverage

Fitch Ratings has downgraded the African Export-Import Bank (Afreximbank) to a high-risk profile, citing concerns arising from the bank’s involvement in Ghana’s ongoing debt restructuring programme. The global ratings agency also announced that it will discontinue its ratings and analytical coverage of Afreximbank for commercial reasons.

In a statement released on Wednesday, Fitch lowered Afreximbank’s long-term issuer default rating (IDR) to ‘BB+’ from ‘BBB-’, while maintaining a stable outlook. The agency also cut the bank’s short-term IDR to ‘B’ from ‘F3’, signalling a higher credit risk than previously assessed.

Fitch explained that the downgrade followed a reassessment of Afreximbank’s risk profile after the bank reached an agreement with Ghana on a $750 million sovereign loan as part of the country’s broader debt restructuring. The move prompted Fitch to revise Afreximbank’s policy importance risk to “medium” from “low” and reclassify its business profile as “high risk” instead of “medium risk.”

According to the ratings agency, Afreximbank’s inclusion in Ghana’s restructuring raised questions about its preferred creditor status, which multilateral development banks typically enjoy. Fitch noted that while it had not previously assigned rating uplift based on this status, the development suggests the bank did not receive de facto preferential treatment, weakening its perceived policy importance.

Before Fitch’s announcement, Afreximbank had formally exited its credit rating relationship with the agency on January 23, stating that the ratings process no longer reflected a proper understanding of its mandate and establishment agreement. Fitch added that its assessment also reflects concerns around governance, strategy, and the bank’s exposure to high-risk operating environments characterised by weak credit quality, low income levels, and elevated political risks across its member countries.

source: The Cable