Dr. George Elombi, President and Chairman of the Board of Directors of the African Export-Import Bank (Afreximbank), took questions from Pinnacle Daily and other reporters at a mid-year media roundtable at the Afreximbank African Trade Centre (AATC) in Abuja, which centered on rating agencies and the focus of the bank going forward. Except:
Standard & Poor’s has just brought Afreximbank back into investment grade after more than a decade. Do you feel this rating is finally justified?
We address this because a few of you have asked. Do we feel justified with the S&P rating? Yes and no. Our shareholders were never shaken by the earlier downgrade in the first place; it didn’t affect their confidence in the bank at all. Even in the middle of that rating uncertainty, we kept lending: when a client needed $700m, we gave it; when Dangote needed $2.5bn, we signed for it. So the rating catching up with where we already believed we stood wasn’t a surprise to our shareholders.
Frankly, if you read the rating report itself, the underlying analysis points to something closer to single-A. It’s the notching for operating in what they call a “risky environment” that pulls it down. We’re not the ones saying the real rating is higher—they are, in the small print.
Walk us through why Afreximbank left S&P’s rating altogether back in 2014.
It wasn’t the first time we’d exited a rating, and it goes back to a fundamental disagreement. At the time, S&P’s position was that a trade finance bank was too small to have real impact and that development couldn’t be built on trade. That view went to the heart of our founding mandate—the treaty that established this institution. We couldn’t sit inside a rating built on the premise that our reason for existing was irrelevant, so we walked away.
We stayed in contact over the following years and kept discussing our business, and it took time—really, a change of leadership on their side—before they came to see that a trade-focused strategy could make us relevant rather than marginal.
You’ve been critical of how ratings agencies treat African risk. Can you explain the “notching” issue you raised?
For a financial institution, your biggest risk is your loan book. Unlike most multilaterals, which lend to governments and wait to be repaid from the budget, we lend against collateral—85 to 90% of our loans and financial investments are backed by an identified source of repayment. On that basis alone, the agencies would rate us quite highly.
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Then they add what amounts to a geography penalty: because the collateral sits in Africa, they notch the rating down, historically by three points, more recently negotiated to two. That’s a subjective adjustment, and it’s arbitrary enough that it can move between negotiations even though the underlying environment hasn’t changed. If the environment is risky, it’s risky — it can’t be three notches one year and two the next for no reason.
Does the same logic apply to how liquidity has been assessed?
It’s actually more counterintuitive there. A decade or so ago, roughly 80% of our external borrowing came from Western markets, and agencies rated that liquidity profile as strong. We then deliberately diversified, building a central bank deposit program that draws funding from African and Asian sources, because the trade pattern itself had shifted toward Asia and because we believe African capital sitting abroad should be captured at home.
Today, dependence on Western funding sources is down to around 12%. Rather than reward that diversification, some agencies then said our liquidity looked weaker because we weren’t raising as much in the Eurobond markets. That’s despite the fact that, during the period they were questioning our liquidity, we were actually sitting on excess cash—we’d deliberately borrowed ahead of an anticipated crisis so we could support member states’ letters of credit if commercial banks pulled back.
What’s your response to critics who say Afreximbank’s exposure to sovereign debt restructurings in countries like Ghana and Zambia justifies caution from rating agencies?
Look at the actual default data rather than the perception. Africa is not the continent with the highest rate of loan default, in percentage terms or in absolute figures. The perception problem is compounded by how the continent’s own media covers itself—we spend a lot of energy highlighting governance failures and very little showing the positive side of African economic activity, and that feeds directly into how outside analysts price our risk.
You’ve floated the idea of an African-run credit rating agency. How serious is that proposal?
Very serious, and it isn’t ours to run, the African Peer Review Mechanism of the African Union has taken up the initiative, and we’re supporting it, but only with our moral backing, not capital or control.
The case for it is straightforward: every other region in the world has its own rating agencies, and Africa doesn’t. It doesn’t require exotic expertise; bankers who’ve spent 15 years lending and auditors who’ve spent 15 years reading corporate financials already know how to build a rating methodology. What it adds is context. Continental banks like us, Ecobank and Zenith Bank, lend almost exclusively within Africa, and they deserve analysts who understand the operating environment rather than assess risk from a distance.
Turning to payments — PAPSS has been live since 2022. Are you satisfied with the pace of adoption?
It’s gone slower than we hoped, mainly because central banks initially worried the system would encroach on their own regulatory functions. But PAPSS exists, it’s functional, and frankly, it has to exist.
You can’t build intra-African trade without a payment mechanism any more than you can move goods without ports or pipelines. We’re now connecting more than 190 commercial banks and fintechs across 28 countries. That’s still small next to the roughly 600 African commercial banks Afreximbank itself deals with directly, so there’s real room to grow before we’d call the ecosystem mature.
Some observers have called the West African pilot a “hijack” by that sub-region. How do you respond to that criticism?
We chose West Africa for the pilot for objective reasons—it already had a head start on monetary integration through the West African Monetary Union, and the mix of currencies there let us stress-test the system against real complexity.
But governing the pilot through the affected central bank governors alone did create the impression, in other parts of the continent, that this was being run for West Africa’s benefit. That suspicion cost us time — probably two years — before we brought governors from unaffected regions onto the oversight structure so they could see the system firsthand. It’s a fair criticism of how we sequenced the rollout, even if the original logic was sound.
With Nigeria among the highest adopters globally of stablecoins for cross-border payments, can PAPSS compete with that kind of private-sector innovation?
We don’t see it as a competition we need to fear. Stablecoins that are genuinely backed by real assets can build trust, and we’re open to working closely with credible projects in that space. But as long as African countries operate separate national currencies, the underlying problem PAPSS solves—settling trade across currency borders—doesn’t go away, whatever payment rail sits on top of it.
Our own view is that sub-regional payment systems will gradually consolidate into regional currencies and eventually a continental one. Once that happens, African digital currencies built on that foundation will make a lot more sense than they do today.
At the Africa Medical Centre of Excellence here in Abuja, what tangible outcomes can you point to?
We’ve put a $75m endowment into an African life sciences foundation to build a dedicated research capacity at the center, starting with sickle cell disease, which disproportionately affects people of African descent.
The logic, which I credit to one of the visiting specialists who advised us, is that if we only treat patients without researching how they respond to treatment, we lose both the scientific insight and the commercial value to research institutions abroad that our data ends up feeding.
A former director of Africa’s Centre for Disease Control is taking that foundation forward, supported by a board of Nigerian medical professors.
What’s holding the hospital back from scaling faster?
Not funding and not equipment—some of what’s installed there doesn’t exist in most European hospitals. It’s staffing. Many of the African specialists we want are established abroad, often for reasons that go well beyond career—children in school, spouses working, entire lives built elsewhere. We’re recruiting in phases: bringing enough specialists to properly staff a given department before we publicize that service, rather than advertise capacity we can’t yet deliver. We’re now working to bring in African specialists from the US, the UK, and elsewhere on the continent, and we’re replicating the model with a second center under development in Cameroon.
What would you say to African businesses and governments about what all this means practically?
A better rating changes mindsets as much as it changes numbers. It changes how bankers price risk, which lowers lending rates. It changes how the diaspora thinks about bringing capital home rather than parking it abroad. But none of that happens automatically—it requires us, and the continent’s own institutions, to keep making the case with evidence rather than assuming the world will simply come around.
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.