African governments are projected to issue $155 billion in long-term commercial debt this year, marking a 10% increase from 2025 levels according to S&P Global Ratings. This borrowing surge comes as countries seek to refinance maturing obligations and address growing fiscal demands, with total sovereign commercial debt expected to reach $1.2 trillion by year-end – equivalent to half of Africa’s combined GDP.
Refinancing and Fiscal Pressures Drive Borrowing
Egypt leads regional debt issuance plans, followed by South Africa and Morocco. The report highlights that while global financing conditions remain favorable compared to previous years, geopolitical instability – particularly from the Iran conflict’s impact on key shipping routes – could disrupt borrowing costs and inflation rates.
Energy Dependence Compounds Challenges
With many African economies reliant on imported refined fuel, sustained oil price increases could strain budgets. Fuel-subsidizing nations like Angola face particular vulnerability. S&P analysts note that multilateral institutions’ concessional financing continues to help contain debt servicing costs below global averages.
Balancing Risks and Opportunities
While current conditions allow affordable foreign currency debt refinancing, the ratings agency warns that prolonged disruptions to maritime trade routes like the Strait of Hormuz could undermine fiscal stability. Market watchers will monitor how these dynamics affect investor confidence throughout 2026.
