Africa now spends 27.5% of revenue on interest payments, nearly 4 times higher than in 2008.
The debt burden is rising faster than economic growth as interest payments as a percentage of GDP grew from 5.4% in 2008 to 8.2% in 2024, showing increasing financial strain.
Effective interest rates have more than tripled from 1.4% in 2008 to 5.0% in 2024, making debt less affordable.
Between 2008 and 2019, the ratio of interest to revenue rose by 12.2 percentage points, and in five years (2019–2024), it surged by another 8.5 percentage points.
As borrowing costs rise, the risk of defaults and fiscal crises in African economies grows, making financial stability a concern.
More money spent on debt means less for roads, hospitals, and schools, slowing down long-term economic progress.
South Africa issued $3.5 billion, making up over a quarter (25.6%) of all issuances on the continent.
South Africa, Côte d’Ivoire, and Nigeria issued $8.3 billion, accounting for 61% of Africa’s total Eurobond issuance in 2024.
Despite economic uncertainties, Nigeria remains an active player in international markets, issuing $2.2 billion in Eurobonds.
Francophone West Africa has a strong presence as Côte d’Ivoire, Senegal, and Benin collectively issued $4.4 billion, highlighting their growing role in Africa’s debt markets.
At $0.75 billion and $0.55 billion, respectively, Benin and Cameroon still secured external financing, but at significantly lower levels than their larger counterparts.
African countries issued a total of $15.7 billion in Eurobonds, demonstrating continued reliance on external debt markets.
While the first ten months totaled $6.2 billion, November and December alone added $7.5 billion, marking a sharp increase.
The total issuance jumped from $6.2 billion in October to $10 billion in November and then $13.7 billion in December, showing a drastic shift in borrowing.
Eight African countries drove this activity, as the borrowing is concentrated among key economies.
By 2028, 76.4% of Africa’s debt will be long-term, up from 75% in 2023.
The share of long-term debt will consistently rise each year.
Short-term and IMF debts will shrink to 23.6% by 2028, indicating reduced reliance on short-term borrowing.
The trend towards long-term debt reduces the immediate financial strain on governments but requires careful management to avoid excessive interest accumulation.
Countries must ensure that extended debt periods are matched with productive investments to justify future repayments.
A higher share of long-term debt could expose African economies to potential interest rate hikes in the future.
While long-term borrowing offers temporary relief, debt sustainability remains a key issue that policymakers must address.
