The Govt Vice President, Governance, Authorized & Company Providers on the African Export-Import {Bank} (Afreximbank), Dr. George Elombi, has defined why Fitch Rankings’ evaluation of the {bank}’s loans to African nations stays a “contradiction” from the {bank}’s perspective.
Elombi careworn that Fitch’s ranking was allegedly a “contradiction” as a result of, regardless of its detrimental outlook, the identical report predicted that inside 18 months to 2 years, those self same mortgage obligations would start to be repaid.
Elombi made these newest remarks on the {bank}’s thirty second Annual Conferences Plenary Session on Thursday, titled “Strengthening Institutional Resilience for Africa’s Progress and Prosperity: The Significance of the Most well-liked Creditor Standing for Financing African Progress and Prosperity,” moderated by Mr. Anver Versi, Editor and Journalist of New African and African Banker magazines.
The event comes days after Fitch Rankings downgraded Afreximbank’s Lengthy-Time period Issuer Default Score (IDR) to ‘BBB-‘ from ‘BBB’, with a detrimental outlook.
“The elevated credit score danger stems from the rise within the {bank}’s non-performing loans (NPLs) ratio as calculated by Fitch, which exceeded the 6% ‘excessive danger’ threshold outlined in Fitch’s standards at end-2024.
“The revision of danger administration to ‘weak’ displays low transparency within the current reporting of mortgage efficiency relative to multilateral improvement {bank} friends, and Fitch’s definition of NPLs differs from the {bank}’s method, which makes use of flexibilities provided by IFRS 9,” Fitch acknowledged.
Nairametrics beforehand reported that on June 10, 2025, Afreximbank challenged Fitch Rankings’ resolution to revise its outlook on the establishment to detrimental, asserting that its {financial} place stays sturdy and its authorized framework protects it from the dangers cited by the ranking company.
In an announcement, the {bank} mentioned it absolutely complies with Worldwide {Financial} Reporting Requirements, together with IFRS 9, which guides the classification of mortgage efficiency. These practices, it careworn, are detailed in its 2024 {financial} statements and supported by an exterior audit.
When requested to touch upon Fitch’s ranking, which identified “non-performing” loans to some African nations equivalent to Zambia, Ghana, and South Sudan, Elombi maintained that Fitch makes use of its personal methodology, which Afreximbank has no situation with.
He added that Fitch was suggested to make clear that it utilized its personal methodology in arriving at its resolution on Afreximbank’s loans.
“Afreximbank, like most establishments, applies worldwide {financial} requirements, and the rule could be very clear. The loans might be in problem, however they don’t seem to be impaired. Making use of that commonplace offers a barely totally different consequence from Fitch’s methodology,” he mentioned.
“To that extent, we actually had no problem with Fitch. We requested them to make it clear of their report that they utilized their very own methodology, which any skilled can overview. Give it to twenty accountants, and also you may get three or 4 totally different outcomes.”
“In order that’s proper and sincere. We merely requested that they state the methodology used. The totally different outcomes stem from totally different methodologies, and each are internationally acknowledged,” he added.
He highlighted that whereas Fitch maintained that the states (African international locations) wouldn’t acknowledge the treaty underpinning Afreximbank’s loans and different {financial} obligations, it contradicted itself by predicting that these mortgage obligations might be settled within the close to time period.
“There’s a contradiction,” he mentioned. “Should you learn the Fitch report fastidiously, it says they imagine that inside the close to time period—18 months to 2 years—these obligations will start to be repaid. So if compensation is anticipated quickly, there’s little to fret about relating to impairment. That’s why the query of requirements arises.”
“If Fitch had offered it(the report) professionally, permitting each skilled to use their judgment, some can be extra essential of Afreximbank, whereas others would ignore what Fitch is saying. That’s why scores typically go up and typically come down.”
He urged Fitch to stay “skilled,” including that this isn’t the primary time Afreximbank has elevated lending to African international locations throughout tough instances.
Afreximbank in a Higher Place Than Multilaterals
Talking additional, Elombi mentioned it’s “very unlikely” that member states would refuse to honor the treaties establishing Afreximbank.
“Why would Fitch be fearful that African governments search to guard an African establishment they created and through which they invested? What else ought to governments be doing than defending their very own establishments?” he requested.
He maintained that the {bank} is in a greater place than a number of multilateral establishments, highlighting that the {bank}’s shareholders embody African states, the African personal sector, and non-African buyers.
Nigeria is one in every of Afreximbank’s main shareholders.
Moreover, Afreximbank has supported Nigeria’s fertiliser manufacturing, enabling the nation to develop into the continent’s main producer with an annual output of seven.5 million metric tonnes.
The {bank} can also be concerned in supporting Nigeria’s artistic trade by credit score services, capability constructing, and market entry initiatives geared toward increasing the nation’s cultural exports.
