African sovereigns are set to deepen their reliance on commercial debt markets, with long-term borrowing projected to rise to $155 billion in 2026, reflecting rising fiscal pressures and growing refinancing needs across the continent.
According to new estimates released by S&P Global Ratings, the projected increase from $140 billion recorded in 2025 reflects the need to refinance maturing obligations while continuing to fund budget deficits and development priorities; a dual challenge facing African governments.
The report also indicates that Africa’s total sovereign commercial debt stock is expected to surpass $1.2 trillion by the end of 2026, equivalent to 45 per cent of the continent’s gross domestic product (GDP) when short-term liabilities are included.
This trajectory signals a steady expansion in Africa’s debt profile, even as policymakers attempt to balance growth ambitions with fiscal sustainability. Analysts note that the increase is being driven almost equally by refinancing pressures and fresh borrowing requirements, highlighting the structural nature of the continent’s financing gap.
Despite the upward trend, borrowing levels across African sovereigns remain modest relative to global peers. The median annual issuance among the 27 rated African countries stands at $1.5 billion, reflecting both the smaller size of many economies and continued reliance on concessional financing from multilateral and bilateral partners.
Such concessional funding has played a stabilising role by reducing dependence on more expensive commercial debt and moderating overall debt servicing costs. However, structural constraints continue to limit access to affordable financing.
African issuers face persistently higher borrowing costs in international capital markets, partly due to a narrow and specialised investor base. At the same time, underdeveloped domestic financial markets restrict the availability of local funding alternatives, leaving many governments exposed to shifts in global liquidity conditions and investor sentiment.
These vulnerabilities have reinforced a cautious approach to commercial borrowing, even as fiscal demands rise. Nevertheless, some of the continent’s largest economies are expected to increase issuance significantly in the coming year.
Countries such as Nigeria, Angola, and Ghana are projected to drive much of the borrowing growth in 2026. In Nigeria and Angola, pre-election spending pressures are likely to elevate financing needs, while anticipated revenue gains from oil markets and tax reforms may fall short of expectations.
Ghana, meanwhile, is expected to shift from fiscal consolidation toward renewed capital investment following austerity measures implemented in 2025. This shift reflects a trend among African economies seeking to revive growth through infrastructure spending, even as debt burdens rise.
Earlier assessments by S&P Global Ratings highlighted that Nigeria will be among the countries facing significant external debt servicing obligations in 2026. Total external debt repayments across Africa are projected to approach $90 billion, adding to refinancing pressures in an already constrained funding environment.
