African Nations to Borrow $155 Billion in 2026 Amid Rising Debt and Fiscal Pressures

African nations are expected to borrow $155 billion in long-term commercial debt in 2026 to refinance maturing loans and manage growing fiscal obligations, pushing total sovereign debt above $1.2 trillion. Egypt, South Africa, and Morocco are projected to be the largest issuers, while favorable global financing conditions and multilateral loans from institutions like the World Bank help ease costs, despite potential risks from the Iran conflict and rising fuel prices in countries like Angola.

African nations are projected to borrow $155 billion in long-term commercial debt this year, marking a 10% increase from the previous year, according to a report by S&P Global Ratings. This borrowing is intended to refinance maturing debt and to manage growing fiscal obligations at the domestic level. If these projections hold, total outstanding sovereign commercial debt across the continent will rise to just above $1.2 trillion by the end of 2026, which is roughly equivalent to half of the combined economic output of the countries in question.
The report identified Egypt as expected to be the largest issuer of commercial debt in 2026, followed by South Africa and Morocco. Analysts cautioned that fallout from the conflict in Iran could affect African borrowing plans this year, potentially influencing both the amount and the cost of new debt issuance. However, S&P noted that the impact might be limited by relatively favorable liquidity conditions in global financial markets compared with previous years. The agency stated, "We expect the war and its implications for hydrocarbon shipping lanes, particularly the Strait of Hormuz, will begin moderating over the next few weeks. But if the war continues beyond that, it could impair fiscal positions, inflation profiles, and financing plans across Africa."
Many African countries depend heavily on imports of refined fuel products, meaning that a surge in retail fuel prices could place additional strain on government budgets. This is particularly relevant for countries like Angola reliance on cheaper credit from multilateral lenders such as the World Bank as a significant portion of overall borrowing.
S&P also highlighted that favorable external financing costs, currently at multi-year lows, offer some relief for African governments. These low costs allow countries to refinance upcoming foreign currency debt maturities at lower rates, providing some fiscal breathing room despite rising obligations and potential disruptions from global geopolitical tensions. The combination of increased commercial borrowing, continued reliance on multilateral funding, and low external financing costs will be critical for African nations as they navigate debt management and fiscal pressures throughout 2026.