• External debt repayments by African states are set to exceed $90bn in 2026

• Egypt alone accounts for nearly one-third of the amount due

• High debt and weak revenue bases keep refinancing risks elevated

African governments are heading into a difficult year on the debt front. In 2026, repayments of external debt denominated in foreign currency are expected to exceed $90 billion, a record level that heightens refinancing risks and puts pressure on foreign exchange reserves, according to S&P Global Ratings.

In its latest outlook on African sovereigns, the ratings agency notes that government external debt repayments are now more than three times higher than in 2012. The sharp increase reflects a decade of rising foreign-currency borrowing, driven by growing financing needs across the continent.

Egypt stands out as the most exposed country, accounting for nearly one-third of the amounts due in 2026, with about $27 billion in principal repayments. Angola, South Africa, and Nigeria also face heavy maturities, adding to concerns about their ability to absorb such a financial shock.

Structural weaknesses and mixed signals

S&P says these pressures are unfolding against a fragile structural backdrop. High debt levels combined with narrow and concentrated public revenue bases continue to pose major risks, said Benjamin Young, an analyst at the agency. External debt repayments are nearing a peak, he added, a trend that could weigh on macroeconomic stability for an extended period.

The agency does, however, point to a relative improvement in the financial environment. The average credit rating of African sovereigns has reached its highest level since late 2020, supported by economic reforms and stronger growth in several countries. Still, S&P cautions that this reflects stabilization rather than a deep structural improvement. Lasting reductions in debt ratios require time, fiscal discipline, and inclusive growth.

Debt management strategies under strain

Easier global financial conditions have allowed some countries to return to international markets, often at a high cost. The Republic of Congo, for example, accepted double-digit yields, levels widely seen as prohibitive. Other governments have turned to alternative options, including private placements or off-market financing structures.

Despite relatively solid growth prospects, averaging about 4.5% in 2026, and a modest narrowing of fiscal deficits, public debt levels are expected to remain high, at around 61% of GDP. In response, several countries are relying on liability management strategies such as early buybacks or maturity extensions to ease near-term pressures. These measures offer short-term relief but do little to resolve the deeper challenges posed by the approaching debt repayment wall.

Fiacre E. Kakpo