African governments are expected to ramp up borrowing on international markets in 2026, with total sovereign commercial debt issuance projected to reach 155 billion dollars, according to estimates by S&P Global Ratings. The figure represents a 10 percent increase from 2025 and reflects growing fiscal pressures across the continent as countries seek to refinance existing obligations and fund development priorities.
The report identifies South Africa, Egypt and Morocco as the leading issuers of sovereign debt in 2026, underlining their dominant position in Africa’s financial landscape. Their prominence is largely driven by the size of their economies, relatively stronger credit profiles and continued access to global capital markets, which many smaller economies still struggle to tap into.
Borrowing activity across the continent is expected to push total outstanding sovereign commercial debt above 1.2 trillion dollars by the end of the year, equivalent to roughly half of Africa’s total economic output. This signals a steady rise in debt levels, even as governments attempt to balance fiscal sustainability with the need to support economic growth and infrastructure development.
In South Africa, borrowing is primarily being driven by the need to refinance maturing debt and fund budget deficits tied to public spending programmes. The country continues to face structural economic challenges, including slow growth and high unemployment, which have placed sustained pressure on public finances and increased reliance on external funding.
Egypt, on the other hand, is expected to maintain its aggressive borrowing strategy to support large scale infrastructure projects while stabilising its fiscal position. The government has invested heavily in transport, energy and urban development initiatives, many of which depend on continued access to international financing.
Morocco’s borrowing outlook reflects a slightly different dynamic, as the country leverages its comparatively stable fiscal environment to finance industrial expansion and long term development strategies. Its stronger macroeconomic management has helped sustain investor confidence, allowing it to secure funding under relatively favourable terms.
The broader increase in borrowing across Africa is being facilitated in part by improved global financing conditions. Lower external borrowing costs have created an opportunity for governments to refinance existing foreign currency debt at more affordable rates, easing short term repayment pressures. However, this window may not remain open indefinitely, especially in a volatile global economic environment.
Despite the rise in commercial borrowing, many African countries continue to depend heavily on multilateral lenders such as the World Bank for concessional financing. Data indicates that the median annual debt among 27 rated African countries remains relatively low at around 1.5 billion dollars, highlighting the uneven access to global capital markets across the continent.
Analysts warn that while current conditions may appear favourable, underlying risks remain significant. Geopolitical tensions, particularly those affecting global energy markets and shipping routes such as the Strait of Hormuz, could disrupt borrowing plans or increase costs. Any escalation that drives up oil prices would place additional strain on import dependent economies.
Countries like Angola, which subsidise fuel imports, are especially vulnerable to such shocks. Rising energy prices could widen fiscal deficits and increase the need for further borrowing, potentially creating a cycle of debt accumulation that becomes difficult to manage.
The outlook underscores a broader challenge facing African economies: balancing the need for financing with long term debt sustainability. While borrowing remains essential for funding infrastructure, social programmes and economic transformation, excessive reliance on debt can expose countries to financial instability, particularly when external conditions shift.
At the same time, the concentration of borrowing among a few larger economies highlights structural inequalities within Africa’s financial system. Countries with stronger institutions and credit ratings are better positioned to access capital markets, while others remain constrained, relying on development finance institutions for support.
Ultimately, the projected rise in sovereign borrowing reflects both opportunity and risk. It provides governments with the resources needed to drive growth and manage fiscal obligations, but also increases exposure to global economic shocks and market volatility.
As 2026 unfolds, policymakers across the continent will need to navigate this delicate balance carefully, ensuring that increased borrowing translates into tangible economic gains without undermining long term financial stability.
