At the World Economic Forum in Davos, Switzerland, last month, global leaders once again invoked a “spirit of dialogue” around reforming international institutions, revisiting debates about whether existing financial frameworks remain suited to a fragmented, multipolar order.

Yet one of the most consequential challenges to financial orthodoxy is unfolding far from the Alpine halls. Across African financial capitals, a high-stakes standoff between the African Export-Import Bank (Afreximbank) and Fitch Ratings is testing the foundations of the global financial system—and raising doubts about the ability of prevailing financial standards to adequately assess development-oriented institutions in today’s world.

At the World Economic Forum in Davos, Switzerland, last month, global leaders once again invoked a “spirit of dialogue” around reforming international institutions, revisiting debates about whether existing financial frameworks remain suited to a fragmented, multipolar order.

Yet one of the most consequential challenges to financial orthodoxy is unfolding far from the Alpine halls. Across African financial capitals, a high-stakes standoff between the African Export-Import Bank (Afreximbank) and Fitch Ratings is testing the foundations of the global financial system—and raising doubts about the ability of prevailing financial standards to adequately assess development-oriented institutions in today’s world.

In late January, Afreximbank severed ties with Fitch, accusing the U.S.-British credit rating agency of fundamentally misunderstanding its legal foundation and development mandate. This came after a monthslong dispute over Fitch’s assessment of the bank’s sovereign exposure, or how much of its lending is tied to the financial health of the governments it works with. Days later, Fitch downgraded the bank from investment-grade to non-investment-grade, or junk status—a shift that signals elevated credit risk and can materially increase borrowing costs.

This is not merely a bureaucratic dispute. Fitch, alongside Moody’s and S&P, forms the dominant triad of global credit rating agencies. Their ratings shape investor behavior, regulatory treatment, and access to capital across markets. For African development finance institutions, the stakes are particularly high. A downgrade can raise borrowing costs by 150 to 300 basis points, often tens of millions of dollars in additional interest payments each year. It can also trigger regulatory constraints that reduce the bank’s lending capacity. Ratings thus influence not only balance sheets but development outcomes, as well.

Founded in 1993 to promote intra-African trade and reduce reliance on external financing, Afreximbank has become one of the continent’s most significant multilateral financial institutions. In 2025, it disbursed more than $28 billion in trade and project finance and held more than $42 billion in assets. Its shareholder base includes 65 member states across Africa and the Caribbean, alongside private and institutional investors.

Afreximbank’s financial model does not conform neatly to conventional credit frameworks, which are designed to assess commercial lenders based on their near-term repayment capacity and sovereign exposure. Unlike commercial lenders, Afreximbank is structured to operate in higher-risk environments in pursuit of long-term structural transformation, trade integration, and industrial development. It extends finance into jurisdictions or sectors where political uncertainty or currency volatility might deter traditional lenders. Evaluating such an institution primarily through short-term metrics risks disregarding the purpose of its mandate.

The question, then, is not whether risk exists in Afreximbank’s lending, but whether prevailing rating models can distinguish between unmanaged exposure and institutionalized risk absorption designed to generate long-term public value.

This tension is not unique to Africa. U.S. institutions such as the International Development Finance Corporation and the World Bank’s International Finance Corporation routinely undertakehigher-risklending in frontier markets to support strategic and developmental objectives. Such activities are widely framed by development finance institutions and policymakers as catalytic and necessary.

The difference lies less in the practice of mission-driven finance than in how that practice is interpreted when undertaken by African institutions. Rating agencies defend their credibility by invoking fiduciary discipline and comparability, or standardized metrics that allow investors to evaluate risk across markets. But comparability is not neutral. It relies on assumptions about time horizons, state backing, and acceptable forms of risk. Those assumptions are often calibrated to advanced financial systems, where the dominant rating agencies are headquartered, rather than development mandates operating under different political and economic conditions.

Just compare various global rating outcomes. Following Fitch’s earlier downgrade of Afreximbank in mid-2025, which lowered the bank to the lowest rung of investment grade with a negative outlook, China’s Chengxin International reaffirmed the bank’s top rating—AAA—with a stable outlook, while Japan’s Credit Rating Agency maintained an A rating.

These divergences do not imply that any single agency is uniquely correct; rather, they underscore that risk assessment is shaped by institutional philosophy as much as by balance-sheet data. They also point to a growing plurality in how financial credibility is defined beyond the traditional trans-Atlantic core. While Western agencies still dominate global capital markets, non-Western institutions are gaining influence in regional financing arrangements and among investors seeking alternative benchmarks.

Historical precedent further complicates the picture. During the 2008 global financial crisis and subsequent eurozone turmoil, several European economies retained investment-grade ratings among the dominant agencies, even as fiscal vulnerabilities mounted. When downgrades eventually occurred, they often followed prolonged periods of market reassurance driven by European Central Bank backstops and coordinated political commitments to preserve monetary union. African institutions have rarely benefited from comparable interpretive flexibility.

The implications of this divergence in risk interpretation extend beyond Afreximbank itself. In 2024, the bank helped launch the Alliance of African Multilateral Financial Institutions, a coalition of 10 regional development banks managing more than $70 billion in assets. The group aims to harmonize risk tools and strengthen due diligence tailored to African market conditions. Although not a rejection of global finance, the initiative reflects an effort to reduce exclusive reliance on external benchmarks and expand regional capacity to assess institutions on terms calibrated to local realities.

Regional financial cooperation is not unprecedented. Asia’s Chiang Mai Initiative and Latin America’s Fondo Latinoamericano de Reservas emerged from periods of financial vulnerability and are now recognized contributors to regional stability. Africa’s efforts to build comparable financial infrastructure reflect similar imperatives: to pool risk, enhance resilience, and reduce dependence on external intermediaries whose frameworks may not align with local realities.

Still, the road ahead is steep. Africa faces persistent structural constraints, including regulatory fragmentation, shallow capital markets, and uneven governance standards. The continent accounts for just 3 percent of global trade, and intra-African trade remains far below European levels. While the African Continental Free Trade Area offers a pathway toward greater integration, gaps in logistics, regulatory harmonization, and trade finance persist. Addressing these challenges requires institutions capable of mobilizing capital and absorbing developmental risk at scale.

Afreximbank has positioned itself accordingly. It plays a leading role in the Pan-African Payment and Settlement System, invests in digital trade infrastructure, and supports skill development in emerging sectors, including artificial intelligence. These initiatives are central to Africa’s participation in a global economy that is increasingly shaped by services, digital platforms, and climate-aligned industries. Their success, however, depends on sustained access to affordable finance, which in turn depends on credible and context-sensitive assessments of risk.

If global rating systems are unable, or unwilling, to adapt to development mandates beyond advanced economies, then they risk reinforcing fragmentation not simply between north and south, but across diverging evaluation systems. Over time, this could accelerate the emergence of parallel financial architectures governed by distinct rating frameworks. Such pluralism is not inherently destabilizing; some diversification is inevitable in a multipolar world. But when standards diverge without coordination, transaction costs rise, regulatory treatment becomes inconsistent, and capital allocation becomes less predictable. The shared informational infrastructure that underpins global markets begins to fray.

This is where the global stakes truly lie.

For policymakers in the United States and Europe, the Afreximbank episode should prompt reflection rather than retrenchment. Maintaining influence in a changing financial order will require engaging with institutions that reflect the priorities and constraints of the global south, rather than discounting them. Credit rating agencies do not have to relax their standards. But to preserve their coordinating role in a multipolar financial system, they may need to reconsider how those standards are defined and applied.

The dispute between Afreximbank and Fitch is therefore not merely about a credit rating. It is an early signal of a broader transition in global finance, one in which authority over risk assessment is increasingly contested. If Davos’s “spirit of dialogue” is to mean anything, then it must extend to finance, and that dialogue must be mutual. In an age of rising multipolarity, credibility can no longer be the monopoly of any single bloc. It must be co-authored. It must be earned. And it must be fair.