A shocking new report by the African Export-Import Bank (Afreximbank) has revealed that South Africa, Egypt and Nigeria alone are responsible for nearly one-third of Africa’s entire external debt.
The report, titled “State of Debt Play in Africa and the Caribbean,” paints a grim picture of Africa’s growing debt problem, warning that the situation could spiral out of control if urgent action isn’t taken.
South Africa leads the pack with 13.1% of the continent’s external debt, followed by Egypt with 12%, and Nigeria with 8.4%. That’s over $1 out of every $3 Africa owes hanging on just three economies.
Other big borrowers include Morocco (5.9%), Mozambique (5.4%), Sudan (5.2%) and Kenya (4.1%). But what’s worse? More than 30% of Africa’s foreign debt is spread across smaller economies, making the entire region vulnerable to a single country’s financial meltdown.
“If any of these countries collapse under debt pressure, it could crash investor confidence and send shockwaves through Africa’s entire financial system,” the report warns.
Nigeria’s debt is already raising red flags. As of December, the country’s total debt hit a record ₦144.6 trillion, with ₦62.9 trillion coming from foreign lenders. In just one year, Nigeria spent ₦13.12 trillion on debt servicing up a jaw-dropping 68% from ₦7.8 trillion in 2023.
Analysts say the crashing naira, which lost 69% of its value in less than two years, is a major culprit. The weakened currency has made repaying foreign loans even more expensive, leaving little room for spending on healthcare, education or infrastructure.
The report doesn’t stop there. It warns that Africa’s debt-to-GDP ratio is still rising, thanks to weak revenue, rising subsidies, public wage bills and post-COVID spending. And with private lenders now holding over 40% of Africa’s debt in some countries, the continent is more exposed to risky market shocks than ever before.
Still, Afreximbank sees a glimmer of hope but only if countries reform fast. Between now and 2029, debt levels could begin to fall if governments manage money better, grow exports and reduce dependency on raw materials.
But that “if” comes with a big warning: none of it will happen without strong leadership, consistent policies and stable foreign support.
For now, Africa is walking a financial tightrope and it’s the people who’ll pay if it snaps.
