11 African nations constituted 69% of the continent's total external debt stock as of H1 2024

Key takeaways:

  • Just 11 countries hold 69% of Africa’s total external debt.
  • South Africa (14%) carries the highest share.
  • Egypt (13%) and Nigeria (8%) are among the top three.
  • Countries from Northern and Southern regions hold over 30% of Africa’s external debt.
  • Many of these nations rely on debt to drive development, but without efficient utilisation, rising debt could become a major drag on future progress.

Africa's external debt is highly concentrated, with just 11 countries accounting for 69% of the continent’s total debt stock in the first half of 2024. South Africa, Egypt, and Nigeria hold 14%, 13%, and 8% of Africa’s external debt, respectively.

A closer look at the data shows that North and Southern Africa dominate, with Egypt, Morocco, and South Africa collectively accounting for one-third of the total external debt. Meanwhile, some of Africa’s fastest-growing economies, such as Kenya and Ghana, also hold significant portions, each with 4% of the total debt stock. This raises questions about how these nations are managing their debt obligations amid growing economic challenges.

Source:

Afreximbank

Period:

2024
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Nigeria secured a record $2.8 billion loan from Chinese lenders in 2017
  • Nigeria has received $9.4 billion dollars in Chinese loans across different sectors since 2002
  • The highest loan inflow was in 2017, with $2.8 billion, mainly for transportation and energy
  • Transportation projects received the most funding, with notable amounts in 2017 ($2 billion) and 2019 ($1 billion)
  • Loan inflows dropped significantly after 2017, with no borrowings between 2020 and 2022, and $973 million in 2023
Transportation accounts for 65% of Nigeria’s loans from China
  • Transportation received $6.2 billion dollars, which accounts for 65% of all Chinese loans to Nigeria
  • Energy projects received $1.2 billion, highlighting China’s role in Nigeria’s power infrastructure
  • Industry and trade/services had the least funding at $368.2 million dollars, reflecting lower Chinese loan priorities in these areas
  • China’s loans to Nigeria between 2000 and 2023 have largely focused on infrastructure development, particularly in transportation and energy
Energy has attracted the largest amount of Chinese loans to Africa
  • Energy attracted the largest share of Chinese loans to Africa, totalling $62.7 billion across 207 loans
  • Transportation received $52.7 billion—the second-highest amount—through 336 loans, making it the most frequently financed sector
  • Agriculture ($2.4 billion) and education ($2 billion) received relatively low funding, reflecting China’s focus on infrastructure
  • Smaller sectors like non-energy mining and services/social protection had minimal Chinese loan activity
Afrexim Research projections show that long-term debt will continue to dominate, making up 76.4% of Africa’s total debt by 2028
  • 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.
The number of debtors backed by movable assets owing financial institutions in Nigeria declined significantly from 2017 to 2018.
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  • The number of debtors began increasing consistently from 2019 to 2021
  • The highest post-2018 debt level was recorded in 2023, reaching 7,390, which is close to pre-2018 figures.
  • The decline in 2018 could indicate cautious borrowing or stricter regulations, while the rise afterward suggests a possible easing of credit access.
Nigeria's external debt has gradually grown to nearly half of the country's total public debt as of H1 2024
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  • Domestic debt has dropped from 73.36% in 2017 to 53.04% in 2024, showing a decline.
  • Nigeria’s increasing reliance on external loans suggests a strategic shift in public debt financing.
  • Unlike other years, domestic debt share slightly increased in 2023, rising to 60.74%, before external debt rebounded in 2024.
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  • If the trend continues, Nigeria’s external and domestic debt may soon be equal, reducing the traditional dominance of domestic borrowing.
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