Nigeria, South Africa, and Egypt control more than one-third of Africa’s external debt, according to a new report from Afreximbank.
The continent’s external debt burden is set to exceed $1.3 trillion by 2025, with South Africa accounting for 13.1% of total external debt, Egypt holding 12.0%, and Nigeria responsible for 8.4%.
The findings come as Africa’s debt trajectory appears to be stabilizing after years of sharp increases between 2016 and 2022, though the continent continues to face mounting financial pressures. Following the top three debt holders, Morocco accounts for 5.9% of the continent’s external obligations, Mozambique holds 5.4%, Sudan carries 5.2%, and Kenya represents 4.1% of total debt.
More than 30 percent of Africa’s foreign debt is spread across smaller economies classified under “Other.” This uneven distribution creates systemic vulnerabilities; fiscal instability in any of the major debt-holding nations could trigger ripple effects across the region through investor sentiment, trade relationships, and interconnected financial systems.
Looking ahead to the period between 2023 and 2029, Africa’s external debt structure is expected to undergo notable changes in both volume and composition. A projected plateau in borrowing suggests a deliberate shift, driven by limited access to global capital, high interest rates, and a cautious fiscal posture among governments seeking to preserve sustainability in the face of growing debt servicing demands.
While the borrowing curve is projected to remain upward, the pace of debt accumulation appears to be moderating.
Encouragingly, Africa’s debt-to-GDP ratio is forecasted to decline by 2028, bolstered by improved economic growth and the adoption of longer-term debt instruments. Still, the continent faces stiff headwinds from persistently high borrowing costs, increased exposure to private creditors, and sustained sovereign risk. Central government debt across Africa is projected to stabilise slightly above 55 percent of GDP by 2029, down from a peak of nearly 63 percent in 2020.
Yet, the financial stress remains acute: as of 2025, 14 African countries are expected to surpass the 180 percent debt-to-exports threshold, while 25 nations will exceed the 20 percent debt service-to-revenue ratio, clear signs of enduring external fragility and fiscal strain.
Foreign exchange reserve adequacy has also weakened significantly, with 26 African countries anticipated to fall short of the IMF’s 3-month import cover benchmark in 2025.