Moody’s Reaffirms Africa Finance Corporation’s A3 Rating with Stable Outlook

The Africa Finance Corporation (AFC), one of the continent’s leading multilateral infrastructure financing institutions, has once again had its long-term issuer credit rating of A3 affirmed by Moody’s Ratings, marking the eleventh consecutive year of maintaining this prestigious investment-grade rating since it was first assigned in 2014. Moody’s also reaffirmed AFC’s short-term issuer rating at P-2, both with a stable outlook, underscoring the Corporation’s continued financial resilience and strong credit fundamentals amidst challenging global and regional economic conditions.

A Testament to Financial Strength and Prudence

According to Moody’s, the rating affirmation reflects AFC’s robust liquidity position, effective credit risk management, and consistent adherence to conservative financial policies. The agency emphasized that despite operating in countries with elevated risk profiles and lower sovereign credit ratings, AFC’s “sound liquidity buffer backed by high-quality treasury assets and resilient asset performance” supports its strong credit standing.

In its latest assessment, Moody’s noted that the Corporation’s prudential and risk management frameworks provide effective safeguards that help mitigate potential credit risks, contributing to its stability as one of Africa’s highest-rated financial institutions.

Record-Breaking Financial Performance in FY2024

AFC’s 2024 financial year was its most successful to date, cementing its status as a major force in Africa’s development finance sector. The Corporation recorded:

• Total revenue exceeding US$1 billion, the highest in its history.

• Total assets growing by 16.7%, reaching US$14.41 billion.

• A Capital Adequacy Ratio (CAR) of 33.6%, well above international regulatory minimums.

• An improved Cost-to-Income Ratio of 17.3%, reflecting strong operational efficiency.

• Exceptional Liquidity Coverage Ratios (LCR) of 194% under normal conditions and 191% under stress scenarios, significantly surpassing the 100% compliance threshold.

These results, achieved amid global financial volatility and tightening credit markets, reaffirm AFC’s reputation for fiscal prudence and strong governance.

Enabling Africa’s Transformational Projects

The affirmation by Moody’s has strategic implications for AFC, enabling it to maintain one of the lowest borrowing costs on the continent. This advantage allows the Corporation to mobilize large-scale capital for transformational infrastructure projects across Africa.

Notable recent investments include:

• The Lobito Corridor railway project, linking Angola, the Democratic Republic of Congo, and Zambia, which will enhance regional trade and industrialisation.

• A US$150 million investment in the Kamoa-Kakula Copper Complex, one of the world’s largest and most sustainable copper mines, reinforcing AFC’s commitment to green industrialisation.

“These achievements reflect AFC’s capacity to catalyse development through strategic, high-impact investments,” said Samaila Zubairu, President and CEO of the Africa Finance Corporation.

CEO: “A Testament to Our Resilience and Global Confidence”

Responding to Moody’s announcement, Mr. Zubairu hailed the reaffirmation as a strong endorsement of AFC’s sound financial stewardship and strategic vision.

“Moody’s reaffirmation of our A3/P-2 ratings for the eleventh consecutive year is a strong testament to AFC’s financial strength and resilience, even amidst global headwinds,” he said. “It reinforces our ability to consistently access long-term capital at competitive rates to deliver on our mandate of financing transformational infrastructure projects that integrate Africa and enable its industrialisation.”

Diverse Funding Strategy and Global Investor Confidence

Moody’s also commended AFC’s diversified funding strategy, noting that the Corporation’s ability to raise funds through multiple instruments and markets strengthens its resilience.

The rating agency highlighted AFC’s “quality of funding structure at ‘a’,” acknowledging its success in sourcing funds across different maturities and from varied global markets. Furthermore, the agency rated AFC’s liquidity resources buffer at ‘aaa’, reflecting the Corporation’s conservative liquidity management and high-quality asset holdings relative to peers.

In the past year, AFC achieved several funding milestones:

• A US$500 million perpetual hybrid bond issuance.

• A US$400 million Shariah-compliant Commodity Murabaha facility, expanding Islamic finance participation.

• A landmark US$1.5 billion three-year syndicated loan, upsized from an initial US$1.3 billion due to overwhelming investor demand.

These transactions attracted a diverse pool of lenders and investors from the Middle East, Africa, Asia, and Europe—demonstrating the continued confidence of global markets in AFC’s creditworthiness and development mandate.

Driving Sustainable Growth Across Africa

AFC’s efforts align with its long-term vision of transforming Africa through infrastructure-led growth, industrialisation, and regional integration. The Corporation’s projects span transport, energy, natural resources, telecommunications, and climate-resilient infrastructure, all aimed at unlocking Africa’s potential and reducing its dependency on imports.

By leveraging its strong credit profile, AFC continues to champion innovative financing instruments such as green bonds, private placements, sukuk, and ESG-linked loans, ensuring that sustainability remains at the heart of its operations.

Looking Ahead

As global financial markets face ongoing uncertainty, AFC’s reaffirmed A3 rating represents more than just a symbol of stability—it underscores the Corporation’s ability to bridge global capital with Africa’s infrastructure needs.

With a decade of consistent investment-grade performance, AFC remains a cornerstone of Africa’s development finance architecture, blending financial discipline, innovation, and impact-driven investment to deliver tangible results across the continent.

For the full statement from Moody’s, visit: https://apo-opa.co/4o1AN6B