S&P projects $155bn for Africa’s sovereign borrowing in 2026

S&P Global Ratings has revealed that commercial long-term borrowing by African sovereigns is projected to rise to $155 billion in 2026, up from $140 billion issued in 2025.

The global credit rating agency disclosed this in a recent report, noting that the increase will be driven by a combination of maturing debt obligations and ongoing fiscal financing needs across the continent.

The report also projects that Africa’s total sovereign commercial debt will exceed $1.2 trillion by the end of 2026, representing about 45 per cent of GDP, including short-term debt.

S&P Global Ratings said the projected rise in borrowing reflects growing financing needs among African economies.

Commercial long-term borrowing is expected to reach $155 billion in 2026.

This represents an increase from $140 billion recorded in 2025.

The rise is driven almost equally by maturing debt obligations and fiscal financing requirements.

Total outstanding African sovereign commercial debt is projected to exceed $1.2 trillion, or 45 percent of GDP.

The agency noted that the outlook signals a steady expansion in Africa’s debt profile as governments continue to finance development and manage existing liabilities.

Despite the projected increase, borrowing levels among African sovereigns remain relatively low compared to global peers.

The median annual borrowing of the 27 rated African issuers is about $1.5 billion.

This is significantly lower than borrowing levels seen in more developed economies.

The lower figures reflect the smaller size of many African economies.

Concessional financing from multilateral and bilateral partners continues to play a major role in funding.

S&P explained that concessional funding helps reduce reliance on expensive commercial borrowing and moderates overall debt costs.

The report highlighted structural challenges that continue to shape Africa’s borrowing patterns, particularly the high cost of accessing international capital markets.

African governments face higher borrowing costs compared to global peers.

The investor base for African sovereign debt remains relatively narrow and specialised.

Domestic financial markets are smaller, limiting local funding options.

These factors make African issuers more vulnerable to global market volatility and tightening liquidity conditions.

As a result, many countries remain cautious in their use of commercial debt despite rising financing needs.

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 borrow more due to pre-election spending pressures.

Expected gains from oil sector performance and tax reforms may be weaker than anticipated.

Ghana is also expected to increase borrowing as it resumes capital spending after austerity measures in 2025.

The shift reflects a move from fiscal consolidation toward renewed investment.