Fitch’s African loan assessment contradicts itself — Afreximbank executive
The Executive Vice President for Governance, Legal & Corporate Services at Afreximbank, Dr. George Elombi, characterized Fitch Ratings’ evaluation of the bank’s loans to African nations as a “contradiction.”He stated that while Fitch provided a negative outlook, it simultaneously anticipated that the same loan commitments would begin to be repaid within 18 to 24 months.
Elombi expressed these views during Afreximbank’s 32nd Annual Meetings Plenary Session on Thursday, at a panel titled “Strengthening Institutional Resilience for Africa’s Growth and Prosperity: The Importance of the Preferred Creditor Status for Financing African Growth and Prosperity,” which was moderated by Anver Versi, Editor of New African and African Banker magazines.
His comments came after Fitch Ratings recently downgraded Afreximbank’s Long-Term Issuer Default Rating (IDR) from ‘BBB’ to ‘BBB-’, maintaining a negative outlook.
“The rising credit risk is attributed to the increase in the bank’s non-performing loans (NPLs) ratio, as assessed by Fitch, surpassing the 6% ‘high risk’ threshold specified in Fitch’s criteria by the end of 2024.
Fitch indicated that the revision of risk management to ‘weak’ suggests low transparency in the recent reporting of loan performance compared to peers among multilateral development banks, and that Fitch’s definition of NPLs differs from the bank’s approach, which utilizes the flexibilities permitted by IFRS 9.”
It was previously reported that on June 10, 2025, Afreximbank contested Fitch Ratings’ decision to adjust its outlook to negative, asserting that the institution’s financial standing remains robust and that its legal framework protects it from the cited risks.
In a statement, the bank asserted its complete adherence to International Financial Reporting Standards, including IFRS 9, which governs the classification of loan performance—practices that can be seen in its 2024 financial statements and were validated by an external audit.
In response to Fitch’s rating, which highlighted “non-performing” loans to countries like Zambia, Ghana, and South Sudan, Elombi acknowledged that the agency based its assessment on its own methodology—an aspect Afreximbank does not contest.
He pointed out, however, that Fitch was encouraged to clearly state that its evaluation was grounded in its proprietary criteria.
“Afreximbank, similar to many institutions, follows international financial standards, and the rule is very straightforward. The loans might be experiencing difficulties, but they are not impaired. Using that standard yields a different outcome compared to Fitch’s methodology.
“In that sense, we did not have any issues with Fitch. We requested that they clarify in their report that they applied their own methodology, which any professional can evaluate. If you presented it to 20 accountants, you might receive three or four different outcomes.
“That’s accurate and honest. We merely asked that they specify the methodology utilized. The varying results arise from differing methodologies, both of which are internationally recognized,” he stated.
Elombi highlighted that, although Fitch asserted some African countries would not acknowledge the treaty supporting Afreximbank’s loans and financial responsibilities, it contradicted this claim by predicting that those same obligations would be repaid in the short term.
“There is a contradiction,” he remarked. “A careful reading of the Fitch report reveals that they believe those obligations will start to be repaid within a short time—between 18 months and two years. Therefore, if repayment is anticipated soon, there is not much concern regarding impairment. This is why the issue of standards emerges.”
“If Fitch had presented the report in a professional manner, enabling each expert to apply their judgment, some might be more critical of Afreximbank, while others might disregard Fitch’s observations. This is why ratings sometimes increase and sometimes decrease.”
Elombi urged Fitch to uphold “professionalism,” noting that Afreximbank has a history of increasing lending to African nations during difficult times.
Leave A Comment