S&P Global Ratings has assigned its ‘A’ long-term and ‘A-1’ short-term issuer credit ratings to Africa Finance Corp. (AFC). The outlook is positive.
In a statement released on Tuesday from Dubai, the ratings agency said the outlook reflects expectations that AFC will further diversify its shareholder base. It also expects the institution to expand capital while maintaining strong capitalisation and liquidity buffers.
Established by treaty in 2007, AFC operates as a public-private partnership. Its mandate is to address structural investment gaps across Africa. The institution also plays a catalytic role in mobilising private-sector capital.
Since its inception, AFC has disbursed a cumulative $18.5 billion. These investments span 36 African countries as of year-end 2025. Its portfolio covers power, transport and logistics, natural resources, heavy industry, telecommunications, and technology.
S&P said the ratings reflect AFC’s strong enterprise and financial risk profiles. The agency pointed to the institution’s solid asset-quality track record. It also highlighted conservative risk and portfolio management practices.
Non-performing loans stood at 1.0 percent at the end of 2024. This was down from 2.6 percent a year earlier. Asset-quality buffers remain strong, with provisions covering 396 percent of impaired loans.
Liquidity metrics were also described as very strong. AFC recorded a 12-month liquidity ratio of 3.1x at end-2024. According to S&P, this provides sufficient capacity to meet obligations under stressed market conditions without slowing planned disbursements.
Despite these strengths, S&P flagged shareholder concentration as a key constraint. The Central Bank of Nigeria holds a dominant 39 percent stake in AFC. Nigerian financial institutions account for an additional 40 percent. Together, they represent about 75 percent of total shareholding.
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While AFC has 60 shareholders, including 23 sovereigns and state-owned entities, many sovereign stakes are small. Several are below 0.5 percent. S&P said these token holdings may indicate limited commitment from some members.
AFC is pursuing a capital-raising programme under its 2024–2028 strategy. The institution aims to raise up to $1 billion to support growth. Since January 2024, it has raised $470 million, largely from fresh equity.
The corporation plans to increase its equity base to $6.6 billion by 2028. This compares with $3.9 billion at the end of 2024.
S&P said the outlook could be revised to stable if AFC fails to make meaningful progress in diversifying its shareholder structure. A significant decline in capital or liquidity could also pressure the rating.
Conversely, an upgrade could follow if AFC meaningfully expands its sovereign shareholder base and strengthens capitalisation through sustained equity injections.