Cheap borrowing: Africa Finance Corporation secures A rating from S&P global

By: Chidozie Nwali

S&P Global Ratings has assigned its first-ever credit ratings to the Africa Finance Corporation (AFC), positioning the multilateral lender as one of the highest-rated investment-grade institutions on the continent.

Earlier this week, S&P assigned the AFC an ‘A’ long-term and ‘A-1’ short-term issuer credit rating with a Positive Outlook. The move is expected to dramatically reduce the corporation’s borrowing costs, allowing it to funnel cheaper capital into critical sectors like power, logistics, and mining.

Speaking on the announcement, AFC President & CEO Samaila Zubairu described the rating as a “strong validation” of the corporation’s financial health and governance.

“This rating reinforces our standing in global capital markets and supports continued access to diversified, long-term funding sources,” Zubairu stated. “It allows us to continue our mission of being a catalyst for private investment in the assets critical to Africa’s economic transformation.” He said.

The rating agency’s decision was underpinned by several key factors in the AFC’s 2024–2025 performance:

S&P noted the AFC’s disciplined risk management, highlighting a non-performing loan (NPL) ratio of just 1.0% at the end of 2024. The corporation maintains liquidity buffers significantly higher than its peers, with a 12-month liquidity ratio of 3.1x.

The agency praised the AFC’s ability to structure complex, cross-border transactions where private financing is often insufficient.

The investment-grade status comes at a pivotal time for the AFC’s project pipeline. The corporation is currently a lead developer in the Lobito Corridor, a massive rail project linking the mineral-rich regions of Zambia and the DRC to the Angolan coast.

With the new rating, the AFC aims to expand its total footprint—which has already seen $18.5 billion invested since its inception—into new greenfield renewable energy projects and digital infrastructure to bridge the continent’s internet gap.

While the ‘A’ rating is a milestone, the Positive Outlook suggests S&P could raise the rating further within the next two years. This is contingent on the AFC successfully diversifying its shareholder base.

The corporation is currently in “advanced discussions” with several nations, including South Africa, Algeria, and Mozambique, to join its current roster of 47 member states.

The AFC’s 2024–2028 strategy aims to increase its equity base to $6.6 billion by 2028, further cementing its role as the “partner of choice” for African infrastructure development.