The African Development Bank (AfDB) has raised fresh concerns over mounting debt pressures across Africa, warning that countries like Nigeria, Ghana, and South Africa remain vulnerable to fiscal instability.
In its latest report, the continental lender highlighted that despite efforts by governments to stabilise their finances, debt levels across the region are still significantly higher than pre-pandemic figures.
According to the AfDB, as of September 2025, at least seven African countries were already in debt distress, while 13 others including some of the continent’s largest economies were at high risk.
The bank noted that rising debt-service obligations continue to strain government finances, leaving limited room for critical investments in infrastructure and development.
The report emphasised that shrinking fiscal space is weakening Africa’s growth momentum, warning that the combined effect of heavy debt burdens and constrained public spending could slow long-term economic transformation.
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It also flagged growing refinancing pressures, cautioning that governments may be forced into adopting austerity measures or resorting to expensive short-term borrowing.
Either option, the AfDB warned, could further undermine fragile economic recoveries.
Although some African countries returned to the Eurobond market in 2025 to raise funds, borrowing costs remain elevated.
For instance, Kenya, Angola, and Nigeria all issued bonds at relatively high interest rates, reflecting persistent market concerns about risk.
The bank added that high financing costs, combined with currency volatility, pose a serious threat to debt sustainability and social spending.
It warned that if left unchecked, these pressures could derail economic progress and heighten social and political vulnerabilities across the continent.
