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.
External debt is set to surpass domestic debt by 2025, reaching a peak of 28.3% of GDP, which indicates a major shift in Ethiopia’s debt strategy.
Ethiopia’s external debt-to-GDP ratio dropped consistently from 26.8% in 2020 to 13.7% in 2024, but a sharp increase is projected for 2025.
Domestic debt peaked at 27.1% in 2021 before declining steadily to 18.7% in 2024, with a further decline expected in 2025 (14.5%).
The sharp rise in external debt in 2025 suggests a major policy shift, possibly driven by the need for foreign capital or declining domestic financing options.
The decline in domestic debt may indicate reduced government borrowing from local sources, which could have implications for local financial markets and inflation.
Foreign debt reliance increases exposure to currency risks and external economic conditions, which could affect Ethiopia’s financial stability in the long run.
FGN Bonds dominate Nigeria’s domestic debt service payments, rising from 66.6% in 2017 to 87.9% in 2024. This reflects a growing reliance on long-term debt financing.
Treasury Bills have seen a sharp decline in their share of domestic debt service, dropping from 30.1% in 2017 to just 6.4% in 2024. This suggests a shift away from short-term debt instruments.
Treasury Bonds, which peaked at 14.9% in 2022, also declined to just 5.6% in 2024.
By 2021, over 80% of domestic debt service payments were already allocated to FGN Bonds, showing a consistent pattern of prioritisation. The trend has only intensified in subsequent years.
The rising dominance of FGN Bonds means Nigeria is locking itself into long-term repayment obligations, potentially increasing the fiscal burden in the future.
This trend underscores the need for careful debt management policies to prevent a future where long-term commitments become a burden rather than a stabilising factor. 🚨
Debt servicing costs have grown significantly over the years, from ₦400 billion in 2010 to an estimated ₦11.8 trillion in 2024 — a nearly 30-fold increase in just 15 years.
Between 2010 and 2024, Nigeria has spent ₦45.57 trillion on servicing its debt, demonstrating the enormity of its financial obligations.
The year 2024 stands out as the most expensive year yet, with ₦11.8 trillion spent on debt servicing — a jump of over 37% compared to 2023's ₦8.6 trillion.
While debt service expenditures grew gradually in the early 2010s, the most rapid increases occurred after 2019, with spending surging from ₦2.4 trillion in 2019 to ₦8.6 trillion in 2023.
From 2019 to 2024, debt servicing costs rose by almost 392%, showcasing how Nigeria’s debt burden has amplified in a short period.
This steep rise in debt servicing diverts resources from critical areas such as infrastructure, health, and education, hindering overall development.
