New Afreximbank President Confronts Strategic Crossroads Amid Fitch Downgrade – Bright Simons

The African Export-Import Bank (Afreximbank) stands at a critical inflection point as its incoming President prepares to navigate a challenging strategic dilemma. The recent credit downgrade by Fitch Ratings placing the continental lender just one notch above junk status has intensified scrutiny on the bank’s future direction and institutional legacy.

According to Bright Simons, Vice President of policy think tank IMANI Africa, the downgrade represents more than a technical rating adjustment. It signals a pivotal moment for Afreximbank’s leadership, with implications that stretch far beyond financial optics.

“News that Fitch, a rating agency, has downgraded the credit of Afreximbank to one notch above junk status will naturally trigger scrutiny of the legacy of Afreximbank’s outgoing Boss, Prof Oramah,” Simons said in a recent analysis.

A Legacy Reassessed

Outgoing President Prof. Benedict Oramah is widely credited with expanding Afreximbank’s balance sheet, visibility, and pan-African footprint. Under his stewardship, the Bank played a central role in providing liquidity to governments, especially during periods of macroeconomic stress. However, Simons highlights one critical shortfall: the failure to secure Preferred Creditor Status (PCS), a designation that insulates multilateral development banks from debt restructuring in default scenarios.

The implications became clear when Ghana defaulted on its sovereign debt in 2022. Afreximbank invoked PCS, seeking exemption from restructuring. Ghana’s then-government, which had benefited from non-programmatic Afreximbank loans, agreed. But under a new administration aligned with the IMF’s debt sustainability framework, the stance shifted, Afreximbank was asked to take a haircut along with other creditors. This episode, according to Simons, is at the heart of Fitch’s credit concerns.

Simons notes that Afreximbank’s operating model diverges sharply from that of traditional multilateral development banks (MDBs) such as the African Development Bank or the World Bank.

Key differences include:

High-interest loans, such as the ~10% facility to Ghana, far exceed concessional rates.

Mixed ownership, combining government and private commercial shareholders.

Opaque operations, with limited public disclosure of loan terms and conditions.

Shorter tenures, typically 7–10 years, compared to MDBs’ 30–40-year loans.

Risk-heavy client base, with many shareholder states carrying poor credit ratings.

Still, Afreximbank’s speed and flexibility have made it a lender of choice for African governments in urgent need of foreign exchange. Simons points out that government deposits with the Bank now exceed $35 billion.

“African governments like Afreximbank’s flexible, transactional, ask-no-questions style,” he remarked.

A Defining Strategic Choice

Looking forward, the Bank’s next President must decide whether to preserve Afreximbank’s unconventional, high-reward model or pivot toward a more conservative and transparent structure that could pave the way to PCS and a stronger credit rating.

“It’s a tough decision: stay with high-risk, high-reward plus flexibility and make a lot of profit. Or reduce profits and growth rate, help broke desperate governments, and boost rating to acquire ‘special status’ reputation,” Simons explained.

The strategic direction adopted by Afreximbank’s new leadership could determine its long-term viability and credibility in global capital markets. More critically, it will shape the Bank’s capacity to effectively support Africa’s economic development in a turbulent global financial landscape.

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