Moody’s has downgraded Afreximbank’s credit rating amid rising debt concerns in Ghana and Zambia.
Moody’s has downgraded Afreximbank from Baa1 to Baa2, citing rising risks from its increased exposure to distressed sovereign borrowers such as Ghana and Zambia. According to Moody’s, Afreximbank’s shift from trade finance to unsecured lending has heightened the bank’s vulnerability in a tough operating environment. Ghana and Zambia, currently restructuring debt under the G20’s Common Framework, owe the bank a combined total of over $813 million. While Afreximbank insists its preferred-creditor status shields it from losses, Moody’s remains unconvinced, also pointing to its limited funding sources. This marks the second ratings cut in a month after Fitch’s downgrade. As yields on Afreximbank’s bonds climb, investors are watching closely in what many view as a critical test of the bank’s resilience.
