Tanzania’s central bank has acquired a stake in African Finance Corporation (AFC), strengthening the regional lender’s capital base and demonstrating growing confidence in the sovereign after receiving its first investment-grade credit rating.
AFC said in a statement on Wednesday that the investment will strengthen its pan-African ownership structure and ability to provide infrastructure financing.
The move comes on the heels of the company securing an A rating with a positive outlook from S&P Global, a milestone expected to reduce funding costs and improve access to long-term capital.
Strong government support and financial strength
The addition of BOT is further consistent with AFC’s strategy to diversify its shareholder base. This is a key concern raised by S&P in its latest review. Increased government support strengthens capital buffers, reduces perceived risk, and allows financial institutions to raise capital on more competitive terms.
“Our investment reflects confidence in the AFC model and is consistent with Tanzania’s priorities of strengthening economic resilience and supporting private sector growth,” said Central Bank Governor Emmanuel Tutuba.
Founded in 2007, the company has invested more than $19 billion in 36 countries as of December 2025, with a focus on sectors such as energy, transportation, heavy industry, and telecommunications. Its model, which combines government support and access to international capital markets, positions it as a key channel for mobilizing long-term finance for high-impact projects across Africa.
“We value this as a strong vote of confidence in AFC’s mission and track record,” said AFC President and CEO Samaira Zubair, adding that this investment strengthens the African-led institution’s role in closing the continent’s infrastructure gap.
Contrasting pressures on Afreximbank
AFC’s strengthened position stands in contrast to the challenges faced by African Export-Import Bank (Afreximbank), which has faced a series of rating pressures over the past year.
Last June, Moody’s lowered Afreximbank’s rating from Baa1 to Baa2, citing weaker-than-expected asset performance and warning that its access to funding sources was shrinking. The agency also warned of increased risks associated with the bank’s increased exposure to unsecured loans to sovereigns in financial stress, a shift away from its traditional focus on trade finance.
More recently, Fitch Ratings further downgraded the institution’s rating to sub-investment grade territory last month, effectively pushing its credit profile further into “junk” status. The situation culminated in a complete severance of the bank’s relationship with the New York-based agency, which no longer evaluates banks’ creditworthiness.
This contrasting trajectory highlights the importance of strong capitalization, diverse shareholder support, and disciplined lending strategies in maintaining investor confidence and access to affordable capital.
Positioning for growth
With a strengthened capital base, improved credit profile and increased government support, AFC is well positioned to expand its lending activities as African economies face increased demand for capital to support industrialization, energy transition and regional connectivity.
Tanzania’s investment not only demonstrates confidence in the AFC’s model, but also signals a broader shift towards greater African participation in financing the continent’s development priorities.
