Africa’s Sovereign Borrowing Set to Reach $155 Billion in 2026 – S&P

Africa’s sovereign borrowing is projected to rise to $155 billion in 2026, up from $140 billion in 2025, according to a new report by S&P Global Ratings.

The agency attributed the increase to a combination of maturing debt obligations and sustained fiscal financing needs across the continent. It also forecast that total sovereign commercial debt in Africa will exceed $1.2 trillion by the end of 2026, representing about 45 per cent of the region’s gross domestic product, including short-term debt.

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S&P stated that the upward trend reflects growing financing requirements among African economies, driven almost equally by refinancing needs and new fiscal spending pressures.

Despite the projected increase, borrowing levels across African sovereigns remain relatively low compared to global peers. The median annual borrowing among 27 rated African issuers stands at about $1.5 billion, reflecting the smaller scale of many economies on the continent.

The report noted that concessional financing from multilateral and bilateral partners continues to play a significant role in funding, helping to reduce reliance on costlier commercial debt and moderate overall borrowing costs.

However, structural challenges persist. African governments continue to face higher borrowing costs in international markets, a relatively narrow investor base for sovereign debt, and underdeveloped domestic financial markets that limit local funding options.

“These factors make African issuers more vulnerable to global market volatility and tightening liquidity conditions,” the report noted.

As a result, many countries remain cautious in expanding their exposure to commercial debt, even as financing needs rise.

S&P expects some of Africa’s largest economies, including Nigeria, Angola, and Ghana, to increase borrowing in 2026.

Nigeria and Angola are projected to ramp up borrowing amid pre-election spending pressures, while anticipated gains from oil sector performance and tax reforms may fall short of expectations.

Ghana is also expected to increase borrowing as it shifts from fiscal consolidation in 2025 to renewed capital expenditure, signaling a return to investment-led spending.