S&P Global Ratings on Tuesday assigned Africa Finance Corporation an ‘A’ long-term and ‘A-1’ short-term issuer credit rating, citing the lender’s strong financial profile, solid asset quality, and robust liquidity, while flagging risks from concentrated shareholding.
The outlook is positive, reflecting expectations that AFC will broaden its shareholder base, expand capital, and preserve strong capitalisation and liquidity buffers, the agency said in a statement issued from Dubai.
Founded by treaty in 2007, AFC operates as a public-private partnership with a mandate to bridge Africa’s infrastructure financing gaps. The institution plays a catalytic role in mobilising private-sector capital into projects across the continent.
Since inception, AFC has disbursed a cumulative $18.5 billion across 36 African countries as of end-2025. Its portfolio spans power, transport and logistics, natural resources, heavy industry, telecommunications, and technology.
S&P said the ratings are supported by AFC’s strong enterprise and financial risk profiles, underpinned by conservative risk management and a solid asset-quality track record. Non-performing loans declined to 1.0 percent at the end of 2024 from 2.6 percent a year earlier, while provisions covered 396 percent of impaired loans, providing a substantial buffer against credit losses.
Liquidity metrics were described as very strong. AFC recorded a 12-month liquidity ratio of 3.1 times at end-2024, which S&P said would allow the institution to meet obligations under stressed market conditions without curtailing planned disbursements.
Despite these strengths, S&P identified shareholder concentration as a key constraint. The Central Bank of Nigeria holds a 39 percent stake in AFC, while Nigerian financial institutions account for a further 40 percent, bringing combined ownership to roughly 75 percent.
AFC has 60 shareholders, including 23 sovereigns and state-owned entities, but many sovereign stakes are small, with several below 0.5 percent. S&P said these token holdings may indicate limited commitment from some members, limiting the breadth of sovereign support implied by the institution’s structure.
The corporation is pursuing a capital-raising programme under its 2024–2028 strategy, targeting up to $1 billion to support growth. Since January 2024, it has raised $470 million, largely through new equity injections.
AFC aims to increase its equity base to $6.6 billion by 2028, up from $3.9 billion at the end of 2024, strengthening its balance sheet as it scales lending and investment activities.
S&P said the outlook could be revised to stable if AFC fails to make meaningful progress in diversifying its shareholder structure. A material deterioration in capital or liquidity could also weigh on the rating. Conversely, an upgrade could follow if AFC significantly expands its sovereign shareholder base and strengthens capitalisation through sustained equity inflows.