Fitch Faces Backlash for Labeling Ghana’s Afreximbank Loan as High-Risk

The African Peer Review Mechanism (APRM) has challenged Fitch Ratings over its recent downgrade of the African Export-Import Bank (Afreximbank).

It follows Fitch’s assessment which suggested that Ghana’s sovereign loan as a non-performing asset.

In a statement issued on June 6, the APRM described the move as both “legally incongruent and analytically flawed,” arguing that Fitch’s interpretation disregards the unique legal framework underpinning Afreximbank’s sovereign lending operations.

Fitch had lowered Afreximbank’s long-term foreign currency issuer rating from ‘BBB’ to ‘BBB-’ with a negative outlook.

The decision cited a 7.1% estimated non-performing loan ratio, with Ghana, South Sudan and Zambia accounting for a significant portion.

But APRM says this view misrepresents the legal basis of the operations of Afreximbank.

It explained that loans to member states including Ghana and Zambia – both founding members and shareholders are governed by intergovernmental agreements and not commercial credit norms.

“The assumption that Ghana, South Sudan and Zambia would default on their loans to Afreximbank is inconsistent with the 1993 Treaty establishing the Bank to which Ghana and Zambia are both founding members, shareholders and signatories,” the APRM noted.

It emphasised that loans from Afreximbank to its member countries are governed by intergovernmental agreements, not commercial lending rules and that no formal default has occurred.

“It is legally incongruent to classify a loan to member countries as non-performing, especially when the borrower states are shareholders in the lender institution, no formal default has occurred and none of the sovereigns have repudiated the obligation.”

Crucially, no formal default or repudiation of obligations has occurred, the body emphasised.

“The assumption that Ghana and others intend to default undermines the spirit of the Afreximbank Treaty and is not supported by any official default,” the statement read.

The APRM further warned that mislabeling intergovernmental loan discussions as signs of credit distress could erode trust in African-led financial institutions and distort investor perceptions.

It has called on Fitch Ratings to revise its assessment approach and engage directly with African institutions to ensure credit evaluations reflect legal realities and regional contexts.

“Fitch has misinterpreted the invitation extended by Ghana, South Sudan and Zambia to Afreximbank to discuss the loan repayments as signalling an intention to default and/or to lift the Preferred Creditor Status.”

“Transparent and context-intelligent credit assessments are vital for fair treatment of Africa in global finance,” APRM concluded.