Afreximbank Reaffirms Financial Resilience Amid Fitch Outlook and NPL Debate

The African Export-Import Bank (Afreximbank) has firmly restated its commitment to financial transparency, sound governance, and its development mandate across Africa, following the release of a Fitch Ratings report on 4 June 2025 that assigned the Bank a ‘negative outlook’. The Bank has addressed the concerns raised in the report, particularly those regarding non-performing loans (NPLs) and sovereign debt exposure, while underscoring its robust financial health, strict adherence to international reporting standards, and its treaty-based operational framework.

Afreximbank has long positioned itself as a key player in Africa’s economic architecture, offering critical trade finance, economic development support, and macroeconomic stability services to its 53 member states. The Bank's leadership is now highlighting the facts underpinning its financial resilience and its role as a treaty-based institution governed by intergovernmental agreements.

Strict Adherence to IFRS and Risk Mitigation

Afreximbank’s financial reporting complies fully with International Financial Reporting Standards (IFRS), including the IFRS 9 framework, which outlines stringent guidelines for the classification of loans, credit staging, and treatment of non-performing loans (NPLs). The Bank's approach utilizes forward-looking assessments of loan performance and risk, a methodology which differs from the definition applied by Fitch in its report.

This variance in methodology is not uncommon. As Fitch notes in its assessment, “Fitch’s definition of NPLs differs from the Bank’s approach, which makes use of forward-looking information.” Afreximbank’s 2024 financial statements — supported by independent external audit opinions — offer a comprehensive explanation of how the Bank stages loan performance under IFRS 9, demonstrating transparency and methodological rigor.

Sovereign Exposure and Credit Risk Strategy

Fitch’s report acknowledges that Afreximbank operates with a high level of collateralization and maintains strong credit risk mitigants, particularly in relation to sovereign exposure. The Bank has proactively taken substantial provisions on certain sovereign loans, which it believes cushions it against future volatility or credit events.

“We have made prudent and early provisions where necessary, ensuring our capital buffers remain intact and our financial integrity strong,” the Bank noted.

Fitch itself recognized this approach, stating that Afreximbank’s risk posture “would reduce any potential further negative financial impact for the bank.”

Strong Capitalization, Liquidity, and Governance

The ratings agency also praised several key indicators of Afreximbank’s financial soundness, including:

• A “strong equity to assets and guarantees ratio”

• “Excellent internal capital generation”

• Low concentration risk

• A liquidity rating of “a”, reflecting the high quality of its treasury assets

These metrics reflect Afreximbank’s proactive governance, capital discipline, and commitment to long-term financial stability.

Clarifying Misconceptions on Sovereign Debt Restructuring

Fitch’s ‘negative outlook’ primarily stems from what it calls “the risk that the debt owed to Afreximbank by some of its sovereign borrowers may be restructured.” Afreximbank has strongly countered this premise, stating that it is not participating in any debt restructuring negotiations involving its member states.

Such involvement would be inconsistent with the Bank’s foundational treaty, which was established through a multilateral agreement among its 53 African member states.

“For clarity, the Bank establishment agreement is a treaty entered into by, and among, all participating states and between the participating states and the Bank. To act outside this framework would violate the very basis of our operations,” Afreximbank stated.

The Bank reaffirmed that its loan treatment and debt-related activities are governed strictly by this treaty, and not by external or speculative reclassifications.

Mandate-Focused Mission: Supporting Africa’s Development Afreximbank continues to prioritize its mandate to promote trade-led economic development across Africa. As one of the continent’s largest multilateral financial institutions, it plays a critical role in:

• Financing infrastructure and industrial development

• Providing counter-cyclical support to member states during economic shocks

• Backing pan-African trade integration initiatives

• Facilitating cross-border investment and innovation

Despite economic headwinds faced by certain African economies, the Bank has emphasized its unwavering commitment to support member states in navigating macroeconomic challenges while fostering sustainable, inclusive growth.

Resilience Backed by Treaty, Strategy, and Transparency

In the face of speculative assumptions and rating downgrades, Afreximbank is standing firm on its foundation of robust governance, prudent risk management, and transparent financial practices. Its 2024 financial disclosures and Fitch's own acknowledgments confirm a Bank that is not only resilient but strategically prepared for the uncertainties of the global and continental economic landscape.

As Afreximbank continues to strengthen Africa’s position in global trade and finance, it reiterates its commitment to operational integrity, financial transparency, and its development-driven mission for the African continent.