The Executive Vice President for Governance, Legal & Corporate Services at Afreximbank, Dr. George Elombi, has described Fitch Ratings’ assessment of the bank’s loans to African countries as a “contradiction.”
He argued that while Fitch issued a negative outlook, it also projected that the same loan obligations would start being repaid within 18 to 24 months.
Elombi made these remarks during Afreximbank’s 32nd Annual Meetings Plenary Session on Thursday, in a panel titled “Strengthening Institutional Resilience for Africa’s Growth and Prosperity: The Importance of the Preferred Creditor Status for Financing African Growth and Prosperity,” moderated by Anver Versi, Editor of New African and African Banker magazines.
The remarks follow Fitch Ratings’ recent downgrade of Afreximbank’s Long-Term Issuer Default Rating (IDR) from ‘BBB’ to ‘BBB-’, maintaining a negative outlook.
“The increased credit risk stems from the rise in the bank’s non-performing loans (NPLs) ratio as calculated by Fitch, which exceeded the 6% ‘high risk’ threshold outlined in Fitch’s criteria at end-2024.
“The revision of risk management to ‘weak’ reflects low transparency in the recent reporting of loan performance relative to multilateral development bank peers, and Fitch’s definition of NPLs differs from the bank’s approach, which makes use of flexibilities offered by IFRS 9,” Fitch stated.
It was earlier reported that on June 10, 2025, Afreximbank contested Fitch Ratings’ decision to revise its outlook to negative, asserting that the bank’s financial position remains strong and its legal framework shields it from the cited risks.
In a statement, the bank emphasized its full compliance with International Financial Reporting Standards, including IFRS 9, which governs loan performance classification—practices reflected in its 2024 financial statements and verified by an external audit.
Responding to Fitch’s rating, which flagged “non-performing” loans to countries like Zambia, Ghana, and South Sudan, Elombi acknowledged that the agency relied on its own methodology—something Afreximbank does not dispute.
He noted, however, that Fitch was urged to explicitly clarify that its assessment was based on its proprietary criteria.
“Afreximbank, like most institutions, applies international financial standards, and the rule is very clear. The loans could be in difficulty, but they are not impaired. Applying that standard gives a slightly different outcome from Fitch’s methodology.
“To that extent, we really had no difficulty with Fitch. We asked them to make it clear in their report that they applied their own methodology, which any professional can review. Give it to 20 accountants, and you might get three or four different outcomes.
“So that’s right and honest. We simply requested that they state the methodology used. The different results stem from different methodologies, and both are internationally recognized,” he said.
Elombi pointed out that while Fitch claimed certain African states would not recognize the treaty underpinning Afreximbank’s loans and financial obligations, it contradicted this stance by also predicting that those same obligations would be repaid in the near term.
“There is a contradiction,” he said. “If you read the Fitch report carefully, it says they believe that within the near term—18 to months to two years—those obligations will begin to be repaid. So if repayment is expected soon, there is little to worry about regarding impairment. That’s why the question of standards arises.”
“If Fitch had presented it(the report) professionally, allowing every professional to apply their judgment, some would be more critical of Afreximbank, while others would ignore what Fitch is saying. That’s why ratings sometimes go up and sometimes come down.”
Elombi urged Fitch to remain “professional,” noting that Afreximbank has a track record of scaling up lending to African countries during challenging periods.
