African nations are set to raise approximately $155 billion in long-term commercial debt this year, reflecting a 10% increase as governments move to refinance maturing obligations and address mounting fiscal pressures.
According to S&P Global Ratings, total sovereign commercial debt is projected to surpass $1.2 trillion by 2026—equivalent to nearly half of the continent’s economic output—highlighting the scale of Africa’s growing financing needs.
Egypt, South Africa, and Morocco are expected to lead borrowing activity, leveraging stronger access to international capital markets.
However, the outlook remains sensitive to geopolitical developments, particularly tensions linked to the Iran conflict. Potential disruptions to key energy routes such as the Strait of Hormuz could drive up fuel costs, placing additional strain on import-dependent economies and widening fiscal deficits in countries like Angola.
Despite these risks, relatively favorable global liquidity conditions and lower external financing costs are providing short-term relief, enabling governments to refinance debt at more manageable rates.
S&P noted that the median annual debt servicing cost across 27 rated African economies stands at approximately $1.5 billion, partly supported by concessional lending from multilateral institutions such as the World Bank.
Nonetheless, the agency warned that prolonged instability could undermine fiscal balances, fuel inflationary pressures, and complicate debt sustainability across the region.
Source: TRT Africa
