The Africa Finance Corporation (AFC) has retained its AAAspc issuer credit rating with a stable outlook, supported by strong liquidity, sound capital management, and its high policy importance across the continent.
This is according to a new assessment by S&P Global Ratings, which also noted that ongoing economic reforms and a gradual recovery in oil production in Nigeria have strengthened the broader credit environment.
The rating agency said the Africa Finance Corporation benefits from a robust liquidity buffer that enables it to withstand adverse market conditions while maintaining operational stability.
“The AFC features very high policy importance, sound capital management and ample liquidity. Its long-term issuer credit rating remains unchanged compared with the previous rating review,” the report stated.
It added that the stable outlook reflects expectations that the corporation’s credit profile will remain broadly unchanged over the next two years.
However, S&P Global also highlighted governance-related risks linked to the corporation’s concentrated shareholder structure, noting that this remains a key constraint despite its strong fundamentals.
Nigeria remains central to AFC’s exposure profile, given its position as Africa’s most populous country and a major hydrocarbon exporter.
According to the report, reforms implemented since mid-2023—including exchange rate liberalisation, fiscal consolidation, and improved tax collection—have helped strengthen external balances and fiscal stability in Nigeria.
Oil production has also shown signs of recovery, rising to 1.60 million barrels per day in 2025, compared with 1.38 million barrels per day in 2022. The improvement was attributed to enhanced security measures and renewed investment in the sector.
Despite these gains, S&P cautioned that structural constraints continue to limit long-term production growth.
“The hydrocarbon sector is a key pillar of the economy, but a significant increase in production is unlikely,” the report said, noting that oil and gas account for nearly 90% of current account receipts and more than one-third of government revenue.
The agency projected Nigeria’s real GDP growth at 3.9% in 2025, with average growth of 3.7% expected between 2025 and 2028. However, it warned that this pace remains only slightly above population growth, limiting per capita income gains.
S&P also noted that tight monetary and fiscal policies, alongside ongoing tax reforms, could weigh on near-term economic expansion.
Within the financial profile of the Africa Finance Corporation, asset quality remained strong, with non-performing loans falling to 0.82% in 2025, while the reserve coverage ratio rose significantly to 595%.
The corporation’s strong liquidity position and policy relevance were cited as key factors supporting its AAA rating, although analysts warned that a downgrade could occur if liquidity buffers weaken, leverage rises sharply, or policy importance diminishes.
S&P Global said it expects AFC’s credit profile to remain stable over the next two years, provided current macroeconomic trends persist and fiscal discipline continues in Nigeria.
The report also highlighted broader infrastructure financing challenges in Africa, noting that while the continent’s institutional capital pool grew by 25% to over $2 trillion in 2025, much of it remains underutilised in infrastructure development.
According to the Africa Finance Corporation, unlocking this capital is essential to addressing Africa’s infrastructure deficit and supporting long-term job creation and economic growth.
