• Moody’s reaffirmed the African Development Bank’s (AfDB) AAA rating with a stable outlook, citing strong financial fundamentals and robust shareholder backing.

• AfDB’s debt ratio fell to 208% in 2024, down from nearly 300% in 2019, outperforming the median of AAA-rated institutions (244%).

• A $3.1 billion capital increase between 2025 and 2032 is set to further strengthen the bank’s equity base.

Moody’s Investors Service reaffirmed at the end of September 2025 the African Development Bank’s (AfDB) AAA credit rating with a stable outlook, maintaining its position among the world’s most creditworthy multilateral institutions.

The agency said the decision reflects AfDB’s solid financial profile, underpinned by strong capitalization, robust liquidity, and the continued commitment of its shareholder members. The rating also reinforces the institution’s credibility as it seeks to mobilize more resources for Africa’s development.

Moody’s said AfDB’s financial strength was bolstered by a general capital increase program that will inject about $3.1 billion into its equity base between 2025 and 2032. The program, alongside other balance-sheet consolidation measures, has significantly reduced the bank’s leverage ratio to 208% in 2024, down from nearly 300% in 2019.

This level remains well below the median debt ratio of 244% for other AAA-rated institutions. The agency also highlighted AfDB’s “comfortable liquidity position,” noting that its high-quality liquid assets more than cover short-term funding needs.

According to Moody’s, the bank demonstrates a strong track record of raising funds globally, successfully accessing multiple currencies, geographic markets, and maturities while drawing on a broad and varied pool of investors.

It added that the AfDB’s liquidity covers more than twice its projected net cash outflows over an 18-month horizon, underscoring its resilience and market confidence.

Shareholder Support as a Key Strength

Moody’s emphasized that strong shareholder backing remains a cornerstone of AfDB’s credit profile. The agency described the support from both regional and non-regional members as “very strong,” citing several historical capital increases that have reinforced the bank’s capital adequacy and operational stability.

This shareholder confidence, Moody’s said, remains essential to maintaining AfDB’s financial strength and long-term sustainability.

The rating agency also praised AfDB’s rigorous risk management framework, which effectively mitigates credit risks in volatile operating environments. This prudence helps preserve the overall quality of its loan portfolio.

Moody’s expects AfDB to maintain its robust financial position and anticipates continued shareholder engagement in the coming years. The agency noted that the stable outlook signals expectations of continued robust shareholder commitment, with regular capital increases and potential extra assistance beyond formal obligations if needed.

However, Moody’s warned that a downgrade, though unlikely, could occur if there were a “significant deterioration in capital adequacy or a reduced willingness or capacity of shareholders to provide support.”

This article was initially published in French by Sandrine Gaingne

Adapted in English by Ange Jason Quenum