African governments are approaching a major external debt repayment peak, with about $90 billion in hard-currency obligations due in 2026, according to S&P Global Ratings.
In its latest African sovereign outlook released on Monday, S&P said government external debt repayments are now more than three times higher than they were in 2012.
“We estimate principal external debt repayments of rated African sovereigns at about $90 billion in 2026,” the report stated.
“Government external debt repayments are approaching a peak and are now over three times larger than in 2012.”
S&P noted that nearly one-third of the total repayments are linked to Egypt, which has the continent’s largest debt burden at about $27 billion, followed by Angola, South Africa, and Nigeria.
The report highlighted wide differences across Africa in the government share of total annual debt service, warning that sharp increases often reflect persistent fiscal deficits and expose countries to greater refinancing risks.
“Large increases in this share typically reflect persistent fiscal deficits and signal heightened government vulnerability to rollover risk and shifts in market sentiment,” S&P said.
S&P added that while stronger domestic financial systems can offer alternative funding options, borrowing locally can come at a high cost during inflationary periods and may reduce credit available to the private sector.
Beyond debt challenges, the agency said rising insecurity and public dissatisfaction are adding further pressure on government finances.
It noted that security conditions have worsened across parts of Western and Central Africa, driven mainly by the spread of Islamist insurgencies in the Sahel and spillover into neighbouring regions.
S&P identified Burkina Faso and northeastern Nigeria as having the most visible increases in insurgency-related violence among rated African countries, while risks were also flagged in Benin, Togo, Cameroon, Chad, Côte d’Ivoire, Ghana, and Mozambique.
The agency warned that managing insecurity poses both financial and operational challenges for governments and could worsen already high spending pressures.
S&P also pointed to rising political instability, including a growing number of attempted coups and protests across the region.
It cited attempted coups in Burkina Faso and Benin, as well as unrest in Madagascar, where it said growing living-cost pressures triggered protests that led to the government being overthrown. It also referenced protests in Kenya in June 2024 over proposed tax increases.
“In our view, spikes in domestic dissatisfaction have the potential to change fiscal policy,” S&P said, particularly in countries facing inflation and cost-of-living pressures while trying to raise revenue through new or higher taxes.
