African governments face rising debt risks in 2026, with hard-currency repayment schedules exceeding US$90 billion, putting pressure on external buffers and creating rollover risks, according to S&P Global Ratings.
The rating agency’s latest African sovereign outlook report, published Monday, highlighted that external debt repayments are now more than three times larger than in 2012, raising concerns about debt sustainability in the region.
“Structurally high debt and low, concentrated revenue bases will continue to pose key risks, and with government external debt repayments likely to exceed $90 billion this year, external vulnerabilities have also increased,” S&P analyst Benjamin Young said. “Government external debt repayments are approaching a peak.”
Egypt faces the largest burden, accounting for nearly one-third of total repayments with US$27 billion due in principal alone. Angola, South Africa, and Nigeria are also among the countries with significant obligations.
S&P noted that average sovereign ratings in Africa have reached their highest levels since late 2020, reflecting reform efforts and improved economic growth. However, the agency stressed that this primarily indicates stabilization rather than substantial improvement in credit metrics, as structural adjustments to reduce debt burdens generally take years to materialize.
The report highlighted that easing global financial conditions and investors’ desire to diversify portfolios have allowed several African countries to access international capital markets. Nevertheless, some sovereigns, such as the Republic of Congo, have faced high borrowing costs, offering double-digit yields that are widely seen as expensive. In response, some governments have resorted to off-market debt solutions, including private placements or total return swaps.
Economic growth across the continent is expected to remain steady, with average real GDP growth projected at 4.5% in 2026. Fiscal deficits are anticipated to consolidate modestly to 3.5 percent of GDP, although overall government debt is expected to remain elevated, averaging around 61 percent of GDP.
To mitigate refinancing risks, several African governments are increasingly turning to liability management strategies. These include bond buybacks, exchanges, and maturity extensions, which help reduce rollover pressures and manage debt service obligations more sustainably. Countries actively using such approaches include Côte d’Ivoire, Benin, Uganda, the Republic of Congo, Mozambique, Kenya, and South Africa.
S&P analysts emphasized that the combination of high debt levels and concentrated revenue sources makes African economies particularly sensitive to external shocks, including global interest rate changes and commodity price volatility. While growth and reform momentum offer some relief, these factors underline the need for careful fiscal and debt management.
“The high volume of upcoming debt redemptions presents both risks and opportunities for governments to implement liability management and strengthen their balance sheets,” the report said. “Effective management will be critical to maintaining access to capital markets on sustainable terms.”
The agency’s warning comes amid continued attention from investors on the sustainability of African debt and the continent’s exposure to global market shifts. Countries with diversified revenue streams, strong policy frameworks, and proactive debt management measures are seen as better positioned to navigate the 2026 repayment cycle.
As African governments confront the $90 billion external debt wall, analysts say careful fiscal planning, ongoing reforms, and strategic engagement with capital markets will be key to maintaining macroeconomic stability while safeguarding development priorities.
