• S&P rated Africa Finance Corporation A/A-1 with positive outlook

• Strong risk management, low NPLs support infrastructure-focused lender

• Shareholding highly concentrated, Nigeria-linked entities hold about 75%

S&P Global Ratings assigned long- and short-term credit ratings of "A/A-1" with a positive outlook to Africa Finance Corporation (AFC) on Wednesday, Jan. 28. The rating agency said the ratings reflect the institution’s "strong risk profile." AFC specializes in infrastructure financing in Africa.

AFC has mobilized a total of $18.5 billion in financing for 36 African countries since its inception in 2007, the agency added. S&P Global Ratings also indicated that AFC maintains a "low risk appetite," underpinned by rigorous risk and portfolio management policies.

The corporation’s investment portfolio focuses on projects that address critical infrastructure gaps while supporting national development priorities. Although its mission-related assets are concentrated in high-risk geographical areas, the institution uses a range of credit enhancement tools, including credit default insurance.

AFC has maintained a "solid reputation" for asset quality despite a difficult operating environment. The institution reported no non-performing loans (NPLs) during its first nine years of activity.

NPLs remained low at 1% as of Dec. 31, 2024, compared with 2.6% a year earlier. This followed the write-off of two of its three non-performing exposures. Provisions covered 396% of non-performing loans at the end of 2024.

The rating agency also noted that the pan-African financial institution has demonstrated solid market access. Capital market funding accounts for 36% of the total, while the remaining 64% comes from banks and development finance institutions (DFIs).

Expanding the capital base

AFC also has significant liquidity reserves. These are primarily composed of government bonds mostly rated "AA," cash holdings, and term deposits placed with highly rated banks.

S&P Global Ratings further highlighted that the institution raises domestic resources by leveraging its structured model as a public-private partnership (PPP) to access various pools of capital across the continent.

At the end of 2025, AFC’s 60 shareholders included 23 sovereign entities and state-owned enterprises, 21 financial institutions, seven pension funds and asset managers, three multilateral credit institutions (2%), and six other private institutions. S&P Global Ratings believes, however, that the shareholding remains concentrated despite the diversity of entities involved.

The Central Bank of Nigeria and Nigerian financial institutions hold approximately 75% of the total capital. "This is one of the highest concentrations among rated multilateral financial institutions," the rating agency said.

"Many other sovereign shareholders have very small token stakes, less than 0.5%, in the institution, potentially indicating a limited commitment to AFC," the agency emphasized. It nevertheless noted as a positive point that no major shareholder has ever withdrawn from the institution.

At the end of 2025, AFC had 48 African member states, of which only 16 had taken equity stakes. Membership is not linked to capital injections.

According to S&P Global Ratings, one of the institution’s primary strategic priorities is now to encourage member states to become shareholders in order to expand its capital base.

Walid Kéfi