Manny Ita
Nigeria is among African countries expected to confront significant external debt repayment pressures in 2026, as total repayments across the continent approach $90 billion, according to a report by S&P Global Ratings.
The report, published on Monday, said rising hard-currency debt obligations are placing increased strain on African governments, weakening external buffers and heightening refinancing risks amid a challenging global financial environment.
S&P estimates that rated African sovereigns will face about $90 billion in principal external debt repayments in 2026, more than three times the level recorded in 2012, reflecting a sharp escalation in debt servicing pressures over the past decade.
Nearly one-third of the total—around $27 billion—relates to Egypt, which carries the continent’s largest debt burden. Angola, South Africa, and Nigeria were also identified as major debtors with substantial repayment responsibilities.
While Nigeria is not the largest debtor, the report said it remains a key country among African sovereigns with sizeable external debt obligations, noting wide variations across countries in the share of annual debt service. S&P attributed large increases in repayment burdens to persistent fiscal deficits and rising rollover risks.
Despite the mounting pressures, the ratings agency expressed cautious optimism about Africa’s sovereign credit outlook, stating that average sovereign ratings have improved to their highest levels since late 2020, supported by ongoing reforms and gradual economic growth improvements.
However, S&P cautioned that structural reforms aimed at sustainably lowering debt burdens are likely to take time to deliver results. It noted that easing global financial conditions have allowed some African countries, including Nigeria, to regain access to international capital markets, even as others face more difficult borrowing conditions.
According to the report, some countries, such as the Republic of Congo, have been forced to offer double-digit yields to attract investors, raising concerns about debt sustainability. In response, several governments are increasingly relying on liability management measures, including bond buybacks, debt exchanges, and maturity extensions, to reduce refinancing risks.
Countries identified as actively pursuing such strategies include Côte d’Ivoire, Benin, Uganda, the Republic of Congo, Mozambique, Kenya, and South Africa.
S&P projected Africa’s average real GDP growth at 4.5% in 2026, with fiscal deficits expected to narrow modestly to around 3.5% of GDP. Despite the anticipated growth, government debt levels across the continent are forecast to remain elevated at approximately 61% of GDP.
In Nigeria’s case, data from the Debt Management Office showed that total public debt stood at N152.40 trillion ($369 billion) as of June 30, 2025, up from N149.39 trillion ($362 billion) at the end of March 2025. The report also noted that Nigeria raised $2.35 billion through a Eurobond issuance in November 2025, which attracted a record $13 billion in investor demand, underscoring continued investor interest despite rising debt levels.
