Japan Credit Rating Agency, Ltd. affirmed Africa Finance Corporation’s long-term issuer rating at A+ with a stable outlook, citing strong backing from member states, preferred creditor status and a conservative financial profile.
The multilateral development bank, backed by African governments and institutions, benefits from its ability to retain substantial earnings and raise capital periodically, JCR said in a report dated July 21. However, the rating is constrained by the relatively high-risk profile of its African borrowers, a large share of private-sector lending, and concentration in its shareholder base.
AFC welcomed four new member states in 2025 — Tanzania, the Central African Republic, Equatorial Guinea and Seychelles — lifting total membership to 48 countries, or about 90% of African nations. As of end-2025, African sovereigns held 58.8% of shares, financial institutions 35%, with the Central Bank of Nigeria remaining the largest shareholder at 39.1%. Combined Nigerian holdings still exceeded 70% of total share capital, though slightly lower than the prior year.
The lender’s outstanding portfolio of investments and loans climbed 19.6% year-on-year to $9.8 billion at the end of 2025. The book comprised 60.7% project and trade finance, 25.6% short-term lending to banks, and 13.7% equity investments.
AFC focuses on power, transport and logistics, natural resources, telecommunications, and technology/heavy industry. Under its 2024-2028 strategy, it is increasing emphasis on renewable energy, minerals essential for green technologies, and integrated supply-chain development.
Asset quality remains solid, with the net non-performing loan ratio at just 0.6% at end-2025, well below the 3% target. Roughly 70% of lending is to the private sector, though risks are mitigated by collateral, insurance and preferred creditor status that helps secure foreign currency during shortages.
JCR said it will watch AFC’s progress in bolstering its equity base, including greater participation by highly rated non-regional investors and expansion of callable capital from sovereign shareholders. It will also monitor any deterioration in asset quality stemming from commodity price swings or rising geopolitical risks.
The rating was assigned on July 15, 2026.
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